Brexit implications and recent regulatory and tax changes in the buy to let sector could result in a 30% exodus by 2021.
27% of landlords have claimed they are looking to offload their portfolio this year as various changes are set to hit landlords financially, according to a national survey from Just Landlords.
Almost a third of all landlords are now a lot more anxious about the buy to let sector than they were a year ago and over a quarter (28%) feel as though the process is extremely stressful.
Emily Morley, of Just Landlords, commented:
“The checklist for a landlord can seem endless, with so many areas to consider. There’s property maintenance to uphold, knowing your rights as a landlord, and what you are required by law to provide for tenants. It can feel like a never-ending task to stay on top of changes in the industry, so we’re not surprised to learn from our survey that so many are finding being a landlord stressful.”
As January 31st nears and the UK is definitely set to exit as the Withdrawal Agreement is given Royal Assent, a large number of respondent landlords feel as though the EU exit will adversely affect the rental market.
A quarter of landlords feel as though rental properties will be harder to come by with tenants feeling the pinch and reduced housing stock whilst 23% are worried that trustworthy tenants will be in short supply.
The phasing out of deductible mortgage interest payments since 2017 will eventually end in April and landlords will receive a tax credit calculated at 20% of their mortgage interest which will reduce their tax liability by the same percentage.
New tax changes alongside increases to stamp duty land tax (SDLT), the abolition of Section 21 ‘no fault evictions’ and the Tenant Fees Act 2019 have led a quarter (26%) of respondents anxious that the following year will be financially costly to landlords.
Morley adds:
“Investing in and letting a property has never been a straightforward process, but we’re seeing an increasing amount of additions and changes to legislation. It’s great that the Government is acknowledging issues within the private rental sector and making attempts to improve housing for tenants, but there needs to be a balance that allows landlords to remain confident in the market.
“2019 was full of surprises, both good and bad, and with Brexit decisions still ongoing, we expect the boat to continue rocking for a while longer. As with any introduction of new legislation, it can take time to acclimatise to change. Landlords must try to look to the future and have faith that the market will not only stabilise but strengthen.
What impact will Brexit and regulatory change have on the buy to let sector?
One Response
I came into an inheritance a few years ago and was concerned at the way that “professionals” urged me to get into the landlord business without due consideration
“Buy-to-fret” looks like a promising source of professional negligence litigation.