Reduced buy-to-let tax relief causing concern for UK landlords
The fall in landlord buy-to-let tax relief is a major factor for 50 per cent of all landlords currently looking to sell, according to a survey by estate agents Your Move and lettings agent network Reeds Rains.
In the summer budget George Osborne cut buy-to-let tax relief to the 20% basic rate.
Despite most of landlords (58 per cent) expecting tenant demand to rise over the next six months, 9 per cent of landlords think now’s a good time to sell up.
Adrian Gill, director of Your Move and Reeds Rains, said: “If a tenth of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants.”
“At a time when tenant demand is only rising, shorter supply will only translate into increased rents,” he added.
Tax reforms were found to be the biggest influence on that decision, due to fears letting will become less profitable when the reforms start to come into force in April 2017.
Landlords are also less than thrilled over changes to regulation, with 44 per cent saying investing in buy-to-let property is more complicated than it was six months ago.
In the Budget, changes were brought in forcing landlords to check their tenants’ immigrations status before they let their properties.
Nearly a quarter of landlords (24%) believe the legislation on letting out properties has become more confusing.
Although tenant demand is expected to grow, rent rises are expected to slow, with landlords predicting rents to grow by just 1.4 per cent over the next 12 months, largely tracking the cost of inflation.
The current annual rate of increase stands at 6.3 per cent, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.