Industry Body Forecasts B-T-L Landlords to Sell Up because of New Tax Changes
Research from an industry body reports that an increasing number of B-T-L Landlords are seriously contemplating selling up and moving out of the private rented sector because of the government’s incoming tax changes.
The 3% stamp duty hike on buy-to-let properties and second homes coupled with the phased reduction of the mortgage interest tax relief is stemming the flow of private investors into the sector, as well as causing existing landlords to leave the market.
The government’s anti-landlord measures is an ill fated move to solely lay the blame on the PRS (Private Rented Sector) because of the lack of potential first time buyers getting onto the property ladder. According to the report the percentage of landlords who will be selling up has more than doubled in just less than two years. In July 2015 just 7% polled said they were leaving the market however the latest figure now stands at 16%.
There is also the other bad news in its findings, claiming that 84% of B-T-L Landlords polled are not willing to expand their property portfolio.
The industry body forecasts that by 2018 there could be a net reduction of property transactions within the BTL sector and of course as supply and demand dictates, rents could increase quite drastically.
Richard Lambert, chief executive of the body, said: “There has been a clear correlation over the past year between our findings on what B-T-L Landlords have told us they intend to do in terms of buying and selling in the coming year and their actual transaction activity.
“If the trends keep moving in the same direction, then by 2018 we’ll have more experienced landlords selling than buying, contributing to a net reduction of private rented properties.”