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TODAY'S OTHER NEWS

Reduced tax relief is top landlord worry

The Government’s decision to reduce landlords' buy-to-let tax relief to the basic rate of 20% is a major factor for half of all landlords looking to sell properties. 

These findings from Your Move and Reeds Rains have highlighted that the tax changes, announced as part of the Summer Budget, are the biggest concern for buy-to-let investors.

It has been disclosed that 9% of landlords think that now is the best time to sell existing properties, with the tax reforms being the primary reason for this decision.

The tax changes, which will be enforced in April 2017, will mean that becoming a landlord will potentially be a less profitable venture.

This isn’t the only factor dissuading landlords from entering the buy-to-let sector. Almost 45% of landlords believe that investing in a buy-to-let property is much more complicated than what it was six months ago, with regulatory changes to blame. 

From February 2016, landlords will also now be required to check prospective tenants’ immigration status as part of the pre-tenancy process.

Almost a fifth of landlords (19%) said they are daunted by this task and feel unequipped to complete the checks correctly without the support of a letting agent. 

Adrian Gill, director of Your Move and Reeds Rain comments: “Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment. The Government’s tax changes appear to be making investing in buy-to-let less attractive because of the seemingly smaller profits margins on offer in the future.”

“If a tenth of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants. At a time when tenant demand is only rising, shorter supply will only translate into increased rents. This may mean landlords are underestimating the likely pace of future rent rises,” he adds.

See todays' guest article from Peter Armistead of Armistead Properties for his take on the proposed changes

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