Do Ministers understand landlords are ‘backbone of the rental market’?
This question has been asked as new research shows the number of landlords within the private rented sector has dropped by 8% or approximately 200,000 since 2019.
This reduction has been pinned on the additional stamp duty costs of entering the market and the reduction in mortgage interest relief, all of which have dampened demand for investment property.
And the number of landlords may reduce further, says property firm Barrows and Forrester, as a further 21% say they are considering quitting the market.
“Minister don’t seem to understand that the buy-to-let sector is the backbone of the rental market and fewer landlords means fewer properties and even less affordable rents,” says MD James Forrester.
His research also highlights how a mass-market exodus could be on the cards ahead of a potential increase in capital gains tax.
But for landlords who have stuck around, returns have been improving; the average value of a property portfolio has increased by £38,820 to £491,234 since 2019.
The largest uplift has been in the SW of England where average portfolio values has risen by £49,000, approximately £10,000 more than anywhere else.
Barrow and Foster says these increases have been driven largely by the stamp duty holiday, which has seen a surge in demand for properties in both the general and buy-to-let sectors, leading to competition and higher offers.
“However, true to form, it seems as though the government will do their best to spoil the party with an increase in capital gains tax via next month’s budget,” says Forrester (pictured).
“This is quite astounding given the string of changes already implemented to stamp duty tax thresholds and tax relief and the impact it has had on landlord numbers.”