Despite changes to the tax relief regime and a stamp duty surcharge, buy to let landlords are still flocking to invest in the sector, according to new figures.
Estate agents ludlowthompson points to record low interest rates and volatility on the stock markets as contributing to the growing numbers of landlords.
The firm used HM Revenue and Customs data to reveal that the number of landlords in the UK rose by 7% to reach 1.75million in 2014.
Apparently, landlords earned £4.2 billion from rental properties, up from £3.1 billion the year before.
Calculating landlord numbers and earnings
The estate agents say the HMRC data is the most up-to-date available for calculating landlord numbers and earnings and they say that the actual number will have risen even more because so many new landlords bought buy to let properties before the 1 April stamp duty deadline came into effect.
In addition to the stamp duty hike, it appears that the government changes to tax relief rules is not putting off investors from becoming buy to let landlords.
Indeed, the chairman of ludlowthompson, Stephen Ludlow, said: “Investors are drawn to buy to let because the returns outperform routinely other investments and buy to let provides a popular alternative to the volatility investors risk when investing in stocks.”
He pointed to a recent report that revealed that buy to let is outperforming all other asset classes including shares, UK government bonds and commercial property.
Rent controls demanded by Labour
Meanwhile, Labour is demanding that councils around the UK be allowed to bring rent controls in.
The call has been made by John McDonnell, the shadow chancellor, who says the powers will help councils limit ‘skyrocketing’ rent increases.
Mr McDonnell explained: “We are looking at giving local authorities powers for imposing rent regulation that will secure fair rents where needed.”
However, new London mayor, Sadiq Khan, is one of the leading Labour figures who says that he does not favour the introduction of rent controls.
Rent controls would push up rents
A spokeswoman for the Department for Communities and Local Government said rent controls would not only push up rents but destroy investment.
She added: “Most tenants are seeing stable rents and are happy with their landlord’s service. The proposals will destroy investment, push up rents and make it more difficult for people to find a house or flat to rent.”
The chairman of the Residential Landlords’ Association, Alan Ward, said: “Rents mirror the economic climate and rise with inflation. If rents are controlled when inflation rises, they will discourage landlords from letting property which will hit supply. Rent controls will also limit a landlord’s ability to finance adequately their maintenance work.”
