Nearly a quarter (24 per cent) of private landlords plan to reduce the number of rental properties they own within the next year, analysis from Emoov has revealed.
The analysis, which examined government-commissioned research by HMRC, found this intention was more potent in the long term with 33 per cent of landlords planning to reduce the number of properties over the next five years.
Emoov suggested these findings underline how fragile confidence is among landlords.
Emoov director, Nick Neale, said: “With policy changes affecting the rental sector, we are seeing an increasing number of landlords selling up, and smaller investors are leaving the market.
“New landlords are not entering the market now because borrowing costs are high and the return is not there. If mortgage costs rise for existing landlords as well, you risk even more rental stock being pulled from the market.”
Neale also suggested that the mortgage uncertainty resulting from the conflict in the Middle East is particularly potent in Wales where incomes are generally lower than in other parts of the UK and affordability can already be stretched.
“Uncertainty across the country and around the world is making people second-guess their decisions, especially when it comes to purchasing a property,” he said.
“Growing economic instability, including rising unemployment, interest rate hikes and climbing inflation, means people are a lot more cautious about what the future may hold.”
Bank of England warning
Neale discussed a recent warning from the Bank of England which cautioned that around 1.3mn more UK households are facing a jump in their mortgage costs as a result of the conflict in the Middle East.
The Bank’s most recent Financial Stability Report said the UK economic outlook has “deteriorated”, increasing pressure on households and businesses and leaving many Welsh buyers reluctant to commit to major financial decisions.
“The warning from the Bank of England will only deepen the anxiety buyers are already feeling,” Neale said.
“If over a million households are braced for higher mortgage costs, people will understandably think twice before taking on fresh debt.
“Taken together, the Bank of England’s warning and the government’s own landlord data paint a picture of a housing market where both homeowners and landlords are being squeezed from all sides.”
tom.dunstan@ft.com
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