A new report reveals that 86% of landlords believe the Government's tax changes last year will discourage investment in the buy-to-let sector and ultimately, lead to a shortage of available of rental homes.
The research, conducted by Orchard & Shipman Group – a leading lettings and property management company – also reveals that almost 90% of landlords think the tax hikes will result in higher rents and a quarter of landlords will be selling some, or all of their properties. However, just 18% of landlords said they would pull out of the market all together. (*Source: Orchard & Shipman Group research amongst 500 landlords, January 2016).
The research also reveals that over 90% of landlords believe they should be free to deduct legitimate costs, just like any other business. More than half of landlords surveyed said they would be raising rents in 2016 to cover the increased financing costs.
Shane Spiers, Chief Executive Officer of Orchard & Shipman Residential comments: “The Government’s changes to the way buy-to-let investors are taxed will inevitably impact revenue. The shortage of housing, a growing rental market and rising property prices is driving increased demand for rental properties. With these market conditions at play, it’s no surprise that landlords will be putting up rents to supplement their income. Unfortunately, it is tenants that will feel the brunt of the tax changes.”
The Government’s ambition to make buy-to-let look less appealing, may yet be thwarted. Many landlords and property investors are committed and passionate and will do whatever it takes to protect their interests. Our research shows that the majority of landlords are looking at ways to recover the potential drop in revenue and we are advising landlords on the options available to them. I believe that the buy-to-let market will pull together to ensure it continues to provide much needed accommodation to meet growing tenant demand.”
Orchard & Shipman Group provides property services to landlords across the UK. The Group has more than 25 years’ experience in delivering services to both the public and private sectors, from a network of offices across England, Scotland and Northern Ireland.