Could new regulations force investors out of BTL this year?
New research by The House Crowd has highlighted that buy-to-let investors are predicting a stormy ride in 2016, with nearly three quarters (72%) reporting that legal changes to the sector this year will have a negative effect on their investments.
A fifth of investors plan to sell their buy-to-let properties in 2016.
Previously viewing their investments as a solid base for sensible financial plans for the future, property investors are concerned that they are being increasingly targeted by legal changes like the Mortgage Credit Directive and increase in stamp duty on buy-to-let properties, coming into force this March and April respectively.
The survey of property investors reveals:
Half say their plans for a secure retirement are now at risk
A third say it will now be harder to support children and grandchildren to get on the property ladder, or to contribute to university fees
Over a third (38%) think landlords should look at newer, smarter ways of investing in property
It appears to be investors with a smaller number of properties that are feeling the pinch. Nearly half (43%) feel that the government is trying to squeeze out smaller landlords, protecting wealthy landlords with many properties.
Frazer Fearnhead, founder and CEO of The House Crowd, said: “Property investment has long been viewed as a sensible way for the shrewd small investor to save for the future, making life a bit more comfortable and paving the way for a financially secure retirement. However, these new regulations are putting increasing pressure on those who own perhaps two or three properties, making it very difficult for smaller landlords to remain in the buy-to-let sector. I'd encourage investors to look at newer options to help them remain in the game, like property crowdfunding - there is another way.”