Anticipation of potential changes to Capital Gains Tax (CGT) is now a leading reason for landlords selling properties, according to the Property118 Landlord Sentiment Survey for Q2. This financial motivation is reported to be as influential as the current cost of borrowing.
The survey, which expanded its questions on why landlords sell, found that the desire to realise gains before any CGT changes scored 4.13, nearly matching higher interest rates, which scored 4.14. Regulatory pressures from the Renters’ Reform agenda and new EPC rules formed a middle tier of reasons.
The speculation surrounding CGT ahead of fiscal events is prompting landlords to consider selling now to secure gains at current rates. This suggests that tax uncertainty, rather than enacted policy, is influencing market behaviour.
Refinancing pressure is also increasing, with 34.2% of landlords in Q2 expecting to remortgage within the next year, an increase from 31.6% in Q1. Many landlords are facing higher costs as fixed-rate deals mature, potentially leading to a squeeze on returns and decisions to sell.