Taylor Scott International News
Recent and forthcoming changes to tax for buy to let landlords in the UK seems to have dented confidence with new pieces of research showing many are set to re-evaluate their situation and put new strategies in place. One new report reveals that just one in five landlords believe there is still money to be made in the buy to let market even although many purchased buy to let property in the last three months to beat the Chancellor's stamp duty reforms. The study conducted by online letting agent PropertyLetByUs, shows that 43% of landlords are considering putting their properties into a limited company to beat the tax rises. Some 5% of landlords have sold buy to let property because of the increased tax burden and 6% plan to reduce their property portfolio and invest their capital in stocks and shares. However, despite all the rhetoric about buy to let profits, only one in six landlords are seeing a reduction in their profits and many of them appear to have strategies in place to off-set the tax rises such as opting for incorporation, but they are also set to increase rents. The surge in landlords investing in buy to let property in the first quarter of 2016 has created a bubble of new rental properties in some parts of the UK, according to a separte report from research consultants BDRC Continental. It suggests that in the longer term, it is likely that the tax changes will limit the supply of rental property and discourage potential new landlords from investing in the buy let market. The good news is that tenant demand will continue to rise, as unaffordable house prices push home owning out of reach for many people. Indeed, according to BDRC Continental’s latest quarterly Landlord’s Panel research report confidence is at the lowest level since the research began almost a decade ago. ‘There are few happy ever after tales here. Many private landlords in Britain are really concerned about the impact of the 2015 Budget when tax relief on private rental properties was cut, and given the housing shortage, the potential knock-on effect on renters and the supply of rental homes is something that we all need to care about,’ said Mark Long, director at BDRC Continental. The report says that confidence in three key metrics has seen the biggest falls year on year; that’s business expectations for the UK Private Rental Sector, UK Financial Markets and Own Letting Business. The majority of landlords, 59%,believe that the 2015 Budget will decrease their profitability Some 81% of private landlords with 20 plus properties believe that they will experience a decrease in profitability, twice as many as single property landlords. Landlords with buy to let mortgages feel hardest hit. Just 39% of those with a buy to let mortgage rate their short term prospects as good or very good, compared to 48% of landlords who are not leveraged. The research also… Taylor Scott International
Taylor Scott International, Taylor Scott
