so many landlords selling
One of the questions is, why are so many landlords selling their rentals at the moment? Great question.
A lot of landlords are selling up, and there’s lots of portfolio landlords selling up too currently, because they’re just a little bit, perhaps, fed up with the way the government have been bringing in various taxes and legislation and rules.
Most of these landlords have been in the market or in the business for quite some time. If you’ve been owning a property and renting a property out for 20, 30 years at a certain level and receiving a certain amount of income, then all the different changes that have come in, the legislations with taxes and income changes and how you hold the property, whether you hold it in personal names and whether you hold it in a limited company, all these kinds of things, have all had effects on your cash flow.
Unless your property is in a situation where you can adapt to that, which you probably can, but if you are of an age that you’ve decided, You don’t want to do this anymore, then you might decide to sell up and actually sell off all your properties and then keep your money in a bank account somewhere and live off the interest or put it into stocks and shares for your retirement. Mind you stock and shares do not give you as good a return as property investment will when done correctly.
Alternatively, there are also people that have got maybe one or two properties that they have been accidental landlords* perhaps, or they’ve had a go at being a landlord, they bought one or two, and with the changes in the rules and the laws, it’s not being as profitable as they thought it was going to be, or they didn’t really buy it correctly.
They bought it without actually getting some proper education and some training and researching it to make sure it will generate them income and have a bit of equity growth also in the property.
So these are the main reasons why people or landlords are selling up.
*Accidental landlords are where you lived in a house and moved for whatever reason but decided to keep the property to rent out. Or you may have inherited the property and then rented it. Effectively you never set out to buy property to rent out,
Now, landlords selling up is also a great opportunity for landlords wanting to buy more or start or begin their property investment journey, because it means that they probably are selling them cheap because they don’t want to do the works to them.
There might be works that need doing to them and it’s come to a stage where they decided, “you know what, do I spend 15, 20, 30,000 pounds on refurbishing the property or do I just sell up and just take my profit and go”?
So that’s also happening along with, you know, people that have not really done a great job on purchasing in the first place and the cost of the income that they’re getting is not so good, not as great as they expect them to. So hopefully that’s answered that question.
I’m Neil Stewart, Clever Property Investing. If you want to know more and you want to get involved, please get in touch. And following on from that question, there’s a follow on question, which effectively I touched on a little bit is how has the new government legislation impacted new landlords or landlords in general?
So the government have put in or are trying to put in an awful lot on the new legislation for rental and for the renters themselves.
Their Renters Reform Act, they’re calling it, but it’s basically about how landlords and tenants will work together going forward.
And at the moment, there’s a lot of talk about something called a Section 21, which was effectively a notice that you could give to your tenant to leave the property with two months without any real reason. You didn’t have to give them a reason why you wanted the property back. So you would just will give them the section 21 notice.
Now, the government and various lobbying groups have suggested that maybe that’s not very fair and not very practical for people who have set up their home and rent a property and think, well, this is going to be where we’re going to be for a long time, that suddenly a landlord gives them two months notice and that that’s not enough time to get sorted out in a new place o . So the new legislation, part of the new legislation is that that act is going to go. There will be no Section 21.
Now, it varies in different parts of the country. If you’re in Wales, you now have to give your tenant six months notice to leave.
If you’re in England, it’s looking like it’s going to be four months, and reasons for why you’re giving that notice.
Valid reasons might be that you want to sell the property. You might be looking to move into it yourself. It might be one of your houses that you had previously and you want to move back.
So those are a couple of reasons that you might do that. Other things that are coming out of the new legislation are that they’re probably going to change the contracts. So at the moment, we’re dealing with something called an AST, short term tenancy, and that may well go.
In Wales. They’ve already done that. And in Scotland, they already have that in place that you can have a contract with the tenant rather than having a short term tenancy. So that’s a couple of the major changes going on there.
There are still going to be plenty of protection in place for landlords and for tenants alike because I think it should be a relationship that works for both people.
So for the tenant and the landlord, there should be a good scenario where they’re both working together.
So your landlord’s making sure the house is in good condition and being looked after all the time.
And the tenant is taking care of the property and paying the rent on time and not causing a nuisance to any of the neighbours or anything else.
So there’s no reason why this can’t work. And this may be a reason why some landlords are jumping out too.
There’s also laws changing around things like stamp duty. They keep changing the stamp duty charges. It’s different for different parts of the country.
So Scotland, England and Wales all have different legislation amounts.
So if you want to learn how to get involved in property or you want to learn about all these differences and how you can make profits in property for the rest of your life, then get in touch with me, Neil, at cleverpropertyinvesting.co