Landlords in UK more worried about tax and the economy than Brexit

Landlords in the UK are not that worried about Brexit but tax and economic uncertainty are the issues that are affecting them in the short term, new research suggests.

Some 41% cites tax and the economic outlook as their biggest concerns while only 28% thought Brexit was a short term issue, according to the latest survey from Direct Line for Business.

The research also found that landlords are most positive about improving house prices with 31% saying so and 29% about interest rates remaining low in the short term.

The report suggests that landlords have a right to be worried as they begin to feel the effects of the tax relief that they get for financial costs such as mortgage interest has started to be restricted to the basic rate of income tax.

Regulation is a key concern for 40% of landlords, who are nervous about the increased risk of prosecution and higher penalties. Indeed, the survey found that many worry about being prosecuted under the Immigration Act due to not checking a tenant’s right to rent.

Failure to carry out checks can lead to them facing criminal prosecution with an unlimited fine and up to five years in prison. Some 40% of landlords are also concerned about inflationary pressures which they fear will reduce the value of their income and increase their costs.

Landlords are also nervous about competition in the marketplace pushing rental prices down. This could be exacerbated further as 40% of landlords are considering new ways to expand their property portfolio in the coming months, thus increasing supply for renters.

The research also found that 32% of landlords are planning to remortgage their properties, which could in part be linked to the fact that 58% are planning minor renovations to their properties in the coming months, which the report says is a strong sign that confidence is high in the sector.

Landlords are also optimistic that domestic demand for rental properties will remain buoyant and that the international market for UK properties will remain high with 27% saying so.

The UK leaving the European Union doesn’t rank in the top 10 short term concerns for landlords, suggesting they don’t think it will have an immediate impact on the property market. Indeed, some 28% believe Brexit could bring positive benefits for landlords.

‘It’s great to see landlord’s being resilient towards the ever changing property marketplace and it’s really positive to hear they don’t appear to be worried about Brexit and the impact on demand,’ said Christina Dimitrov, business manager at Direct Line for Business.

‘The continued low interest rate environment can only benefit landlords and tenants. However, experts are predicting an interest rate rise in the future and the Prudential Regulation Authority’s tougher underwriting rules for buy to let mortgage lenders may bring some challenges for landlords wanting to expand their portfolios,’ she added.