Buy To Let
A fifth of landlords plan to sell properties
One fifth of members of the National Landlords Association (NLA) plan to reduce the number of properties in their buy-to-let portfolios this year, the highest level of intended property sales in 10 years.
The NLA said this is likely to be due to recent tax changes. Landlords have suffered a triple-hit from the withdrawal of mortgage interest relief for higher and additional rate taxpayers, a 3% surcharge on purchases of additional property and the banning of upfront letting fees for tenants.
The group has created a series of videos with Capital Economies to assess and explain the impact of these changes on landlords and tenants. It also gives ideas on how landlords can respond to the changes. It warns that tenants may end up paying higher rents, as supply of rental property diminishes.
Richard Lambert, CEO of the National Landlords Association, said: “The government needs to look at the impact these policies will have on the private rented sector. More and more people are relying on this sector for a home, so it is vital that landlords not only provide a high standard of accommodation, but are incentivised to do so by the prospects of a reasonable return on investment.
“It is our view that these policies are undermining the viability of many landlords’ businesses and removing the incentives to invest in residential property for business purposes.”
Simon Heawood, chief executive officer and founder of Bricklane.com, said: “We will see steadily increasing outflows from the buy-to-let market, in favour of a continual consolidation of portfolios around professionalised, large scale landlords, who in turn benefit from scale advantages, tax-efficiencies, and professionalised approaches to investing and driving up tenant service provision.
“A perfect storm is brewing for landlords looking to property simply as a financial asset. Policy makers across the political spectrum are acknowledging that homeownership is valuable because it affords permanence and security, and not just for the financial returns which placated constituents of yesteryear.”
Buy-to-let investors may also be deterred by a weakening housing market. Halifax gave a downbeat assessment of the prospects for the UK housing market in 2018, saying prices rose by 2.7% in the last three months of 2017, compared to the same period a year earlier. This was significantly behind analyst expectations of a 3.3% rise.
