Taylor Scott International News
Government policies aimed at cooling the UK’s buy to let market are making landlords cautious about their future investment plans for 2016, increasing pressure on the private rental sector, research shows. Although 68% of landlords surveyed by lettings agency Belvoir had not raised their rent in the last 12 months, some 86% believe that increased purchasing costs for investment properties will inevitably lead to increased rents. The majority of landlords who responded to the survey were investment landlords with one to 10 properties and 93% of these rental properties were located in England. They were asked how changes to stamp duty and taxation were likely to influence their investment plans for the next 12 months and 44% said they will be adopting a cautious approach to further investment. Some 68% of landlords had not increased their rents at all in the last 12 months, and almost half of those surveyed have no plans to increase rents in the next 12 months. However 88% believe that increased purchasing costs for investment properties, due to a rise in stamp duty and lack of buy to let mortgage tax relief, will ultimately lead to increased rents. Landlords are almost equally divided in their views as to whether they think buy to let remains a good investment for new people coming into the market. A total of 46% thought it would still be a good investment and 40% thought it would not, with 14% undecided. When asked what effect on the rental sector the Government’s drive on home ownership will have, the results were varied, with some landlords predicting a slowdown and others predicting minimal effect, as so many people are not in a position to buy their own homes or prefer the freedom of renting. There were also concerns that many landlords would get rid of potentially uneconomic property portfolios, resulting in a shortage of rental property and large rent rises. ‘The majority of landlords named George Osborne’s anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with our prediction that increased Government interference in the buy to let market will put a real squeeze on the supply of property in the rental market in 2016 and beyond,’ said Belvoir managing director Dorian Gonsalves. Meanwhile, the firm’s rental index shows that in the fourth quarter of 2015 many of their lettings agents across the country are not reporting a mass exodus of rental properties from the market. Of those that are leaving, many are accidental landlords who are anticipating being hit by the impending loss of mortgage interest relief. Indeed, in many areas, including Wales, there has been increased activity with landlords looking for advice to buy further properties before the stamp duty increase kicks in. In cities such as Cambridge, where the population is increasing, there are… Taylor Scott International
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