May 26, 2022

Buy to Let: An Un-Sustainable Business Model? - NRLA

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In November 2021 the London School of Economics (LSE) published a report commissioned by the NRLA. The core objectives of the report are firstly to understand how changes since 2015 in taxation have affected landlords’ business models and incentive structures and how landlords might respond to those changed incentives. Secondly, the report examines how landlord taxation in England compares to systems in other comparable economies.

A third objective, particularly given the timing of this research, which was from April to October 2021, has been to clarify landlord views on the relative importance of recent tax changes as compared to the impact of Covid on their business decisions.

This article looks at a short section of the report where former landlords were asked a selection of questions about their previous portfolios and their reasons for leaving the PRS.

FORMER LANDLORDS’ SAMPLE

Some 61 respondents to the survey were former landlords who no longer rented out property. This landlord grouping were previously members of the NRLA and are therefore expected to be more well informed on legislative and tax changes affecting the PRS.

As is standard in most NRLA surveys, landlords are asked about the size of their portfolios. This is an essential metric to assess differences between landlord behaviour in the sector.

This group of former landlords were found to most likely be smaller portfolio landlords. Almost half of former landlords were previously single property landlords (49%), this contrasts with the larger survey of active landlords where just 32% were single property landlords.....

 

To read the full article plus much more insight on sustainability, download the Sustain-ability magazine below.

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