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New study suggests over one in ten landlords will reduce their portfolio within 5 years

Depositphotos 122714138 m-2015

The Council of Mortgage Lenders (CML) recently commissioned a survey of UK landlords to find out more about landlords, their motivations, and aspirations.

The study of 2,500 UK landlords - which was carried out by the London School of Economics on behalf of the CML – found that:

  • around 49% own all their property outright, with no mortgage debt at all;
  • 47% of the rented properties in the survey are backed by a buy-to-let (BTL) mortgage;
  • 62% own a single rented property, with BTL landlords more likely to have a multi-property portfolio than other landlords.

Why become a landlord?

The main reasons the respondents became a landlord were: 

  • as part of their pension planning;
  • for capital growth and income;
  • in preference to other investments;
  • to supplement earnings.

Future plans

The survey suggests that more landlords expect to reduce their property portfolios than increase them with: 

  • 6% of landlords expecting to reduce their portfolios over the next 12 months;
  • 14% expecting to do so over the next five years;
  • 5% of BTL landlords saying they will divest during the next 12 months;
  • 11% of BTL landlords expecting to reduce their portfolios during the next five years.

The reason for reducing a property portfolio was mainly as part of a planned exit.

21% of landlords, however, said any element of tax changes influenced their decision to sell while 36% of BTL landlords said tax featured as an element in their future plans. 

The full survey can be accessed from the CML website.