Landlords intending to sell properties ahead of the Autumn Budget later this month could find their plans complicated by the need to secure vacant possession, Savills has stated. The firm's head of residential research, Lucian Cook, anticipates that the limited time available and challenges in obtaining vacant possession since Section 21 ended will likely curb any rapid increase in sales.
Mr Cook commented, "We expect the spike to be less pronounced this time around." This forecast raises questions about how readily landlords can react to tax uncertainty, as a decision to exit the market does not always result in a completed sale before the Chancellor delivers the Budget.
Savills' analysis of HMRC figures indicates that average profits for tax-paying landlords decreased by 11.2% in 2024/25, while finance costs rose by 32%. Mr Cook expects financial pressures on landlords to persist as fixed mortgage deals expire, suggesting "a further fall in taxable profits in 2025-26." However, Savills' interpretation of income tax data shows that fewer than 40% of private landlords hold mortgages, which Mr Cook believes will contribute to a more gradual landlord sell-off than previously feared.
HMRC figures also suggest a slight dip in investment property and second home sales in 2025/26. Savills' prime landlord survey found that 11% had sold, with more considering sales when market conditions improve. However, second home disposals do not necessarily represent landlord exits, and the prime landlord survey does not encompass the entire sector.