Buy-To-Let Exodus Central Housing Group

Landlord Retirement Surge

BTL investors leaving the market and selling up are being driven by landlord retirement with around 140,000 retiring last year and the number is likely to continue, says Hamptons.

Landlords leaving the market and selling up are being driven by retirement, latest analysis from Hamptons reveals.

Around 140,000 landlords retired last year, accounting for the majority (73%) of all sales by investors (see chart).

Many of these investors were early adopters of the first buy-to-let mortgages which were launched in 1996.

With the average landlord turning 60, analysis by Hamptons reveals that it’s predominantly these older investors who are leaving the market.

RISING

And the number is likely to continue rising over the coming years with around 96,000 landlords turning 65 each coming year across Great Britain. This is on top of the almost one million landlords (924,000) who are already over the age of 65.

Over the last 12 years between 2010 and 2022 Hamptons estimate that the number of landlords retiring annually has doubled as their demographic ages (see chart).

The purchases made by these landlords 15-25 years ago following the introduction of the buy-to-let mortgage still make up the majority of privately rented homes in Great Britain.

Just over half (51%) of today’s total number of outstanding buy-to-let mortgages were taken out between 1996 and 2007. And it’s this cohort of ageing investors who bought when the sector was growing rapidly that are now increasingly likely to sell up and cash out.

While age tends to be the primary trigger for selling up, in many cases the decision to sell has been compounded by lower-than-average returns, which in turn have been exacerbated by higher interest rates, in turn creating more landlord retirement.

An investor who bought 20 years ago was achieving a gross yield of 4.3% relative to their sale price, compared to a landlord buying today who is achieving 6.1%

INVESTORS

Aneisha Beveridge, Head of Research at Hamptons, says: “Two decades on from the birth of buy-to-let mortgages in the late 1990s, early investors are starting to sell up.

“This means that demographics alone will push up the number of landlord sales over the next five years to reach a new peak.  This was likely to happen irrespective of the tax or regulatory changes introduced since 2016 and the more recent higher interest rate environment.

“But while the tax and regulatory changes haven’t driven a buy-to-let sell off, they have stemmed the next generation of landlords.

“While house price growth continues to slow, rents keep moving in the opposite direction.”

Blog Post from The Negotiator

See details of our Guaranteed Rent Scheme here

If you have any comments, please email the author of this article and click on the link above

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors



Registered Office: Woodgate Studios, 2-8 Games Road, Cockfosters, Hertfordshire, EN4 9HN | Registered in England and Wales | Registered Company No. 3961047 | VAT Registration No. 752 6015 48

 

Social Media Auto Publish Powered By : XYZScripts.com
Google Rating
4.8
Based on 109 reviews
js_loader