Buy-to-let investors continue to streamline portfolios by offloading properties

The latest analysis from quick sale specialists, Open Property Group, has revealed that despite enjoying strong rental income growth on an annual basis, the average buy-to-let investor has reduced the size of their portfolio by as much as -27% across England and Wales.

Open Property Group analysed the latest data on buy-to-let portfolio sizes and how they have changed over the last year when it comes to size and profitability*.

The research shows that with an average of 8.5 homes, the average investor has reduced their portfolio size by -1.6% year on year.

However, across some regions, the reduction in portfolio sizes have been far more pronounced and nowhere more so than Yorkshire and the Humber, where the average size of a buy-to-let portfolio has fallen by -27% to an average of nine properties.

Across the West Midlands the average buy-to-let inverter currently holds 10.7 properties within their portfolio – a reduction of -19% year on year, with the South West also seeing an average reduction of 13% to 6.5 properties.

The average size of a buy-to-let portfolio has also reduced across the North East, central London market, East Midlands and East of England. However, there has been growth across outer London, the North West, South East and Wales.

This is despite the fact that the average rental income per property has increased by an average of 8.8% over the last year, with investors across Yorkshire and the Humber seeing the largest jump at 30.9%.

However, while rents may be climbing, the figures also show that profit margins are in decline, with the average rental yield falling by as much as -1% across the North West and central London regions.

CEO of Open Property Group, Jason Harris-Cohen, commented:

“Much has been made about the landlord exodus in recent times and it’s fair to say that the severity of this trend has been largely exaggerated. However, the figures do suggest that while buy-to-let investors may not be exiting completely, they are reducing the size of their rental property portfolios.

In fact, buy-to-let investors are accounting for an increasingly larger segment of sellers looking to utilise the quick sale route, as they look to off-load part of their portfolio with minimum fuss or stress, having benefited from years of rental income and capital appreciation.

With a reduction in capital gains tax fast approaching, we expect more investors will look to streamline their portfolios given that the cost of existing is set to reduce and who can blame them?