Tax and regulatory changes are beginning to ‘bite’
It is expected that many landlords will sell part or all of their portfolios over the next few years. Tax increases, more stringent regulations, the cost of the tenant fee ban and trying to avoid the additional tax burdens are all reasons quoted.
A decline in new investments in buy-to-let and even the potential ‘death’ of the small scale landlord has been predicted.
In its latest research from January this year, the National Landlords Associations (NLA) reports that 20% of its members are planning to reduce their portfolios over the next 12 months as a result of these changes.
The Residential Landlords Association (RLA) has published results from a more comprehensive survey amongst its members (3,289 replies) confirming much the same.
When asked about the consequences in relation to the 3% additional stamp duty, as many as 69% felt discouraged from making further property investments.
As a result of the changes to mortgage interest relief, about 62% of landlords said that their profitability would be reduced by 20%.
In its Private Rented Sector Report from January , ARLA Propertymark reported that the supply of rented property fell by 8% from December to January whilst tenant enquiries increased by 18%. There were also early signs of more landlords negotiating rent for existing tenancies.