Is increasing regulation impacting landlord profits?

At what point does the upward trajectory of landlord and rental market regulation impact on the ability for landlords to achieve a profit, and what happens if they exit the market?

 

We will be covering the details of the recently published white paper in our following blog, but the lettings market has certainly reached a peak in terms of compliance and legislation.

Necessary and safeguarding legislation is welcome for both landlords and tenants alike, however at what point does this start to materially impact landlord profit?

The data is starting to show that we are reaching a tipping point where being a landlord is becoming less appealing and profit margins are being squeezed. Many landlords are now looking towards the exit door. 

Many landlords have been selling their properties and / or trying a short-let centric letting model to claw back some of the losses. Some key stats on this are:

  • 10% of private Landlords plan to sell and exit the market in the next two years - up from 5% as of 2018
  • One in ten homes currently listed as for sale has, at one point in the last three years, been let according to Zoopla data
  • 55% of Landlords planning on exiting the rental market cited legislation as the key driver; there are currently 170 pieces of legislation governing the industry. 

We firmly believe that we are now starting to see the impact of all the changes landlords have faced.  The additional stamp duty, tightening of the BTL mortgage market, and increased legislation has been building over recent years.

Our take

We believe the rental market needs balance and that even with increased regulation, a good profit is still very achievable for landlords. 

If you are a landlord looking to extract more value which will enable you to stay as a landlord and sustain the flow of much needed rental housing, then Lyvly can help. 

Our market leading Co-Living model ensures your assets’ returns are maximised while at the same time ensuring the condition is maintained / enhanced.  We have strong demand across London and as we are in an unprecedented time of increased living costs, demand is strengthening by the week as tenants look to maximise their return on income when it comes to housing.

Also, if you are a landlord who needs to apply / renew your HMO licence, this is something Lyvly can also help with so we are removing any additional friction.

To find out more about Lyvly and what we can do to help, you can contact us here.

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