A new sentiment survey of landlords has revealed that a growing number of them are looking to sell their properties because of the upcoming buy to let tax relief changes.
The sentiment survey from Your Move and Reeds Rains says that the tax change is a ‘major concern’ for landlords and 23% say that now is a good time to sell their rental properties.
In addition, landlords also say that letting a property will be less profitable when the tax reforms take effect from April 2017.
However, 31% of landlords believe that now is a good time to expand their buy to let portfolio though 44% say that buying rental properties is now more complicated.
With the ‘Right to Rent’ checks coming in next year, nearly 20% of landlords said they would be daunted by the prospect and don’t feel experienced enough to let their properties without the support from a letting agent.
Landlords say that the laws for rental properties have become more confusing
Another 24% of landlords say that the laws for rental properties have become more confusing and, alarmingly, 11% say they do not understand current regulations.
A director of Reeds Rains and Your Move, Adrian Gill, said: “Landlords are feeling deflated and it’s a worry to see this may motivate them to reconsider their investments.
“The tax changes appear to make investing in buy to let property less attractive because of smaller profit margins in the future.”
He added that landlords are also underestimating how quickly they will need to hike rents in a bid to meet a drop in income.
The survey also reveals that there is still a growing demand for rental property in the UK which is outstripping supply.
The survey reveals that 52% of landlords say there’s been an increase in tenant demand over the past six months and around a third say they will able to find a new tenant within the notice period of their current tenant choosing to leave.
Landlords’ organisation criticises councils
Meanwhile, the Residential Landlords’ Association (RLA) says that many local authorities are wrong to be charging landlords for licences in a bid to collect information on how many are working in their area.
The RLA says they have been exposed for doing this without good reason.
The organisation points to the Department for Communities and Local Government which makes clear that councils already have the power they need to ask tenants for rent information about their rental property’s tenure and the identity of the landlord.
Local council to compile a register of landlords
This will, says the government, enable every local council to compile a register of landlords.
The RLA’s chairman, Alan Ward, said: “We are now calling on councils to drop the tenant’s tax which licensing has now become. Councils should use powers they have to identify landlords and go after the criminals.”
