Majority of BTL investors say 'it's business as usual' despite tax changes

According to a new survey of over 170 property investors, 56% of Shawbrook clients are planning to purchase a buy-to-let property within the next 12 months.

Related topics:  Landlords
Warren Lewis
7th March 2016
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The survey captured the mood in the market amongst Shawbrook clients and outlined their top challenges and expectations for 2016.

With changes in tax approaching, Shawbrook can reveal that 40% plan to set up a limited company for their properties to counter the impact of tax changes, whilst 33% plan to raise rents.

While the outlook for investors remains positive, new changes to tax relief and stamp duty have caused some investors to check their ambitions. Of the 44% who are not planning on purchasing a new BTL property this year, just over a third (37%) said it was due to the 20% cap on tax relief for BTL properties making the proposition unattractive, whilst almost a fifth (16%) said the 3% extra stamp duty levy on second homes and BTLs was putting them off.

The latest figures also revealed that almost half (49%) of clients said they considered regulation to be the biggest challenge facing property investors over the next 6 months, a significant increase on last year’s Barometer results, which found that regulation was something only 23% of investors considered to be the biggest challenge they faced.

Despite these challenges, 61% have a positive outlook for the upcoming 12 months, predicting either a large or small increase in property value. In total 43% of landlords saw an increase in tenant demand in 2015 and 61% saw an increase in their rental income. A further 44% are confident that their business will grow in 2016.

Karen Bennett, Sales & Marketing Director Commercial Mortgages comments: “As a lender it is always great to see such positivity in the market, and as with our Broker Barometer conducted in late 2015, it seems that there is a lot of optimism amongst property professionals also. Obviously the new changes will have an effect and may instil more caution across the market; however, Shawbrook is well-placed to adapt to change, and we are expecting the market to remain buoyant.”

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