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Smaller landlords looking to exit market buy-to-let market

Smaller landlords looking to exit market buy-to-let market
John Fitzsimons
Written By:
John Fitzsimons

Landlords with two or fewer properties are more likely to be considering exiting the market than those with larger portfolios.

The research from the Deposit Protection Service (DPS) found that around one in four landlords with smaller portfolios are planning to sell their properties and leave. This is more than double the 12% of landlords with portfolios of more than 10 properties.

The study also found a clear difference when it comes to the attitude to purchasing, with landlords with more than 10 properties almost three times more likely to intend to buy than those with only a small portfolio, at 13.51% compared with 5.63%.

Of those looking to leave the market, more than a fifth (21.72%) are not set up as a limited company for their rental activity, compared with just one in 10 (10.34%) of those who have incorporated.

The study looked into accidental landlords too, and found more than a third (35.80%) of those who let out a property that used to be their own address intend to sell it, compared with less than a fifth (18.08%) of those who bought the property with the intention of renting it out.

Previous research from the DPS has suggested that some larger landlords are buying up the properties of those with smaller portfolios.

Matt Trevett, managing director of the DPS, said the data suggests landlords operating on a larger scales are showing a stronger commitment to the private rental sector than those with only a property or two.

He continued: “We are also seeing different intentions emerge among landlords who use companies compared with those who don’t, suggesting that how a landlord chooses to organise their business has a significant impact on their attitude towards the market.”

Paul Fryers, managing director at Zephyr Homeloans, added that landlords owning properties through a limited company was “fast becoming the norm”.

“We would encourage brokers to work closely with their landlord customers to thoroughly investigate the most effective ownership options for their existing portfolio or additional property investments,” he continued.

Related: Buy-to-let landlord sell-off slows down but new rental purchases remain low.