The vast majority of rental property owners (the term ‘landlords’ is understandably disliked by many in the sector, and seen as outdated) – 82% according to the English Landlord Survey – are non-professional, owning fewer than 5 rental properties.

Since 1997, when buy to let mortgages became widely available, rental property owners have had a great deal. Rental income and capital growth that in most locations outpaced stock market returns.

This rosy period is over now. Seeing rental demand growing, unmatched by supply of quality rental homes, the government began to put in place policies with the goal of creating a more professional Private Rental Sector. Examples of policies include:

The combination of regulatory pressures and higher interest rates are triggering a ‘landlord exodus’.

Rental property owners have a number of options, including:

  1. Sell now and reinvest elsewhere
  2. Redevelop
  3. Keep for later but stop renting it out eg use as second home

Let’s look at each.

‘Sell now’ is actually several options:.

Once you have sold, there are plenty of options. You can select your own investments or work with a wealth advisor. It’s likely that you can achieve returns at least as good through indirect investments after the costs of complying with current and planned regulations, with less hassle, if you are not currently a professional investor.


Hold for another use

The investors we are working with who are considering selling find it useful to detach from the emotional pull and focus on what they are likely to make in the future, rather than what they might have made had they sold at the price peak of 2022. The truth is, the costs of sideline property investment have increased. By contrast, many REITs (companies which own property and can be traded on the stock exchange) are trading below Net Asset Value (NAV).

Read the article in The Telegraph, here