Why Are North East Landlords Selling Up in 2024?
The rental market in the North East, encompassing areas like Newcastle, Sunderland, Durham, and Middlesbrough, has long been a cornerstone for property investors. With strong tenant demand and rising rental prices, it might seem like the perfect time to be a landlord.
However, many North East landlords are choosing to sell their buy-to-let properties due to increasing challenges in the market. At Home Sold Today, we specialise in helping landlords in the North East transition smoothly out of the rental sector.
Let’s explore why so many landlords are selling up and how we can help.
Key Reasons North East Landlords Are Selling
1. Higher Buy-to-Let Mortgage Interest Rates
Interest rate hikes have hit landlords across the UK, and the North East is no exception:
2022: The average fixed-rate buy-to-let mortgage stood at 4.3%.
2024: Rates have risen to an average of 5.5%, significantly impacting profitability.
For landlords in areas like Whitley Bay, Sunderland, or Hexham, these increased costs are squeezing margins, especially for those with multiple properties.
2. Loss of Buy-to-Let Tax Relief
Until 2017, landlords could claim generous tax relief on mortgage interest payments. This relief allowed:
Basic-rate taxpayers: To deduct 20%.
Higher-rate taxpayers: To deduct up to 45%.
The removal of this relief has left many landlords in the North East with smaller returns, making it harder to justify holding onto their investments.
3. Stricter Lending Rules
In 2017, new rules required lenders to assess a landlord’s entire portfolio when granting mortgages.
Result: Landlords with four or more properties are now deemed higher risk.
Impact: Many North East landlords, particularly those managing larger portfolios, face higher interest rates or struggle to refinance.
4. Increased Stamp Duty
Changes to stamp duty have further eroded buy-to-let profitability:
2016: An additional 3% stamp duty surcharge was introduced for buy-to-let investors.
2024: The surcharge increased to 5%, significantly raising upfront costs for North East landlords.
This has discouraged new investors and prompted existing landlords to consider selling.
5. Rising Challenges with Tenants
Even in landlord-friendly areas like Gateshead or Stockton-on-Tees, tenant issues can add stress:
Rent Arrears: Tenants falling behind on payments disrupt cash flow.
Property Damage: Poor maintenance by tenants can lead to costly repairs.
Eviction Difficulties: Changes to eviction laws mean it’s harder than ever to regain possession of a property.
6. Increased Regulation and Administration
The rental sector has seen a surge in new rules, including:
Bans on Admin Fees: Landlords can no longer charge tenants for administrative tasks, increasing financial pressure.
Energy Efficiency Standards: Properties must now meet stricter energy performance criteria, requiring costly upgrades.
For landlords in areas like Darlington or Hartlepool, these additional responsibilities make managing rental properties less appealing.
Selling a Buy-to-Let Property in the North East
If you’ve decided to sell your rental property, there are several routes to consider:
1. Property Auctions
Auctions can be a quick way to sell, especially for tenanted properties.
Pros: Attracts investors, and the process is faster than the open market.
Cons: No guarantee of sale, and properties often sell below market value.
2. Traditional Estate Agents
Selling through an estate agent is a popular choice for vacant properties.
Pros: Reaches a wider audience, including residential buyers.
Cons: Long timelines (5-7 months on average) and no guarantee of a sale.
3. Professional Property Buyers
Companies like Home Sold Today offer a hassle-free alternative:
Fast Completion: Sell in as little as 7 days.
No Fees: Avoid estate agent and auction fees.
Guaranteed Sale: No reliance on property chains or uncertain buyers.
Sell As-Is: We buy properties in any condition, with or without tenants.
What About Selling with Tenants?
Selling a tenanted property can be tricky, but it’s entirely possible:
Pros: You can continue collecting rent until the sale is complete.
Cons: Limits your buyer pool to other landlords, potentially reducing the sale price.
At Home Sold Today, we specialise in purchasing properties with tenants in situ, ensuring a smooth and quick process for landlords across the North East.
Capital Gains Tax for Landlords
When selling a buy-to-let property, you’ll need to consider Capital Gains Tax (CGT):
Tax Rates:
Basic-rate taxpayers: 18%.
Higher-rate taxpayers: 28%.
Tax-Free Allowance: £3,000 for 2024/25.
Expenses like property improvements or selling costs can reduce your taxable gains. Be sure to consult with a tax professional to maximize your savings.
How Home Sold Today Can Help North East Landlords
At Home Sold Today, we understand the unique challenges faced by landlords in the North East. Whether you’re managing properties in bustling Newcastle or quieter suburbs like Cramlington, we offer a stress-free solution tailored to your needs.
Why Choose Us?
Local Expertise: We know the North East property market inside and out.
Quick Sales: We can complete in as little as 7 days, saving you time and money.
No Hidden Costs: We handle all fees, including legal costs.
Flexible Options: Sell with or without tenants—no need for evictions or renovations.
Final Thoughts
The North East buy-to-let market remains attractive to some, but for many landlords, rising costs and increased regulations are tipping the scales. If you’re considering selling one property or an entire portfolio, it’s crucial to choose the right sales method to maximize your returns and minimize hassle.
Contact Home Sold Today for a no-obligation cash offer and see how we can make selling your North East rental property simple, fast, and stress-free. Let us help you take the next step with confidence.
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