"Smaller landlords continue to be squeezed. This isn't market evolution, it's regulatory capture through tax complexity."
The latest UK Finance figures show that buy-to-let mortgages were down by 14.5% in the three months to June, with many amateur landlords leaving the property market.
Eamon Shahir, founder of Taxd, says that as costs rise, for landlords with one or two properties, this side hustle is no longer worthwhile so many are selling up.
He believes the Chancellor is creating a "compliance moat which destroys a historically reliable and growing tax base, at a time when the government is scambling to recover government funds".
Shahir added: "When running costs and income tax exceed profit margins, exit becomes inevitable. And that’s exactly what we’re seeing with the 14.5% drop in buy-to-let mortgages.
"This represents a systemic elimination of the UK’s most compliant property tax base as amateur landlords provide stable, predictable receipts in an effort to remain HMRC compliant. In contrast, professional landlords are more likely to be tax-savvy and legally aggressive, taking advantage of any deductions or loopholes available.
"The fundamental issue is scale. Institutional operators can spread overpriced compliance requirements across vast portfolios, while someone with one or two properties cannot. Institutional owners also own property through company structures to avoid paying the income taxes small landlords do as well as bearing a proportionally smaller cost of compliance.
"Meanwhile, smaller landlords continue to be squeezed. This isn't market evolution, it's regulatory capture through tax complexity.
"The Chancellor is inadvertently creating a compliance moat that protects institutional players while destroying a historically reliable and growing tax base.
"Once again, squeezing landlords is largely a tax on working people rather than big businesses, as the UK property market is dominated by amateur landlords rather than large corporations with huge portfolios."
