Landlords say that a more efficient eviction system is the best way to encourage increased investment in the buy to let sector, research reveals.

According to mortgage market specialist Pegasus Insight, it found that 64% of landlords prioritise streamlining the eviction system, eclipsing even lower taxes as a motivator.

A reduction in Capital Gains Tax, the reintroduction of tax relief on mortgage interest payments, and removal of the 3% Stamp Duty surcharge were also cited by more than 60% of landlords as key factors.

Also, 59% of landlords expressed interest in investing if BTL mortgage rates dipped below 4%, while 52% sought greater regulatory stability.

These preferences were echoed by landlords planning to sell within the next year, who placed an even stronger emphasis on eviction reform at 71%.

‘Valuable insight into landlords’ concerns’

Bethan Cooke, a director of Pegasus Insight, said: “This research provides valuable insight into landlords’ concerns.

“The fact that a larger proportion of landlords point to a more efficient evictions process as a greater spur to investment than a lower tax regime demonstrates how worried they are about the removal of Section 21 ‘no-fault’ evictions in the Renters’ Rights Bill, which the government has confirmed it will introduce within the next year.

“It is no secret that there is a massive backlog in processing evictions through the legal system, and industry bodies have warned that banning Section 21 could overwhelm the courts and prove the final nail in the coffin for some landlords.”

She added: “Our research demonstrates that, whatever form the new Bill takes, it must be considered carefully to take into account landlords’ concerns as well as tenants’, to prevent a decline in rental property numbers, and an accompanying rise in rents.”

Influential factor in encouraging investment

The research found that a drop in house prices was not seen as an influential factor in encouraging investment, with just 16% of all landlords identifying this as important.

Ms Cooke said: “When it comes to taxes, these results confirm that, if the government wants to encourage more investment in the private rented sector which plays a key role in providing homes for almost 20% of UK households.

“It would do well to consider reviewing the punitive tax regime which has been imposed on landlords in recent years, rather than increasing CGT or tightening the screw on limited company landlords, which many fear.”

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