With 2020 set to be another difficult year for buy-to-let landlords, some investors are already preparing their exit strategies - but is now really the time to cut your losses?
A new report has found that some landlords are considering selling at least one property this year, ahead of further changes to mortgage interest tax relief and an overhaul of eviction rules.
Here, we explain your options if you're looking to sell up, and offer advice on whether refinancing your portfolio might be a smarter move in the short term.
A survey of 800 landlords by the insurer Simply Business has found that a quarter of investors are looking to sell at least one property this year.
A third said they had seen their rental yields drop in 2019, while one in four said they expected yields to fall in 2020, painting a bleak picture for embattled investors.
If you decide to sell up, you'll need to prepare an exit strategy and ensure you time your sale carefully to avoid any significant financial ramifications.
The first thing you'll need to decide is whether you want to sell your property as tenanted or vacant.
Next, it's time to think about the financial implications of selling up.
Above this threshold, basic-rate taxpayers will pay 18% on their property gains, while higher and additional-rate taxpayers must pay 28%.
You'll also need to time your sale to avoid any additional mortgage costs. For example, if you've got several years to run on a long-term , you might need to pay early repayment charges if you sell up.
If you're not dead-set on selling, you could rescue your buy-to-let profits by refinancing your portfolio through remortgaging.
The most recent data from UK Finance shows that in October 2019, around £2.7bn was lent to landlords remortgaging, compared with just £1bn for those buying new investment properties.
And there's no doubt that now is a great time to secure a good deal on a buy-to-let mortgage, with average rates dropping to just 3% this month, compared with 3.3% a year ago.
The research by Simply Business found that eight in 10 landlords aren't planning on expanding their portfolios in 2020, but there are bargains out there for the select few willing to take a calculated gamble.
There's no denying that the property market has stagnated over the past year. Indeed, the most recent Land Registry House Price Index showed that prices fell by 0.7% month-on-month in October, and increased by just 0.8% year-on-year.
A quiet market with fewer people buying can be good news for those looking for a cut-price deal, but at a time of flat prices and stretched profits, you'll need to focus on bringing in a good rental yield.
If you're shopping around for a new property, ask the following questions:
As we mentioned earlier, it's a complicated time to be a landlord, but we're here to help.