BTL tax changes Central Housing Group

A fifth of B-T-L investors selling up but most adopt wait-and-see strategy

B-T-L investors are taking a wait and see approach when it comes to additional investment in the sector according to a market monitor produced by Shawbrook Bank.

The annual survey reveals the biggest challenges facing investors over the next six months with 22 per cent citing regulation concerns, 21 per cent stating possible interest rate movements and 16 per cent worried about lending restrictions.

When it comes to regulatory challenges, the change that has most affected the sector is the reduction on tax relief for buy to let mortgages, with over half of investors saying this had the biggest impact. This has increased from last year’s results where 35 per cent said this had affected them most.

To counteract the changes, some landlords are looking for ways to protect their portfolios.

A third have already, or are planning to, set up a limited company whilst 18 per cent intend to re-mortgage and a fifth are looking to sell their property or properties.

However, some 49 per cent say they are going to wait and see what happens over the next six to 12 months before they put any measures into place.

“We have seen a slight cooling as landlords evaluate their options, not rushing into purchases and holding existing property. It is important to recognise however, that BTL remains a crucial component in the wider UK housing landscape, and data suggests that although investors may tread carefully throughout 2018, they retain confidence in the fundamentals of this market” explains Karen Bennett, Shawbrook’s commercial mortgages managing director.

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