Research reveals 20% of landlords plan to reduce their portfolios in the UK in 2018
Some 20% of landlords in the UK private rented sector are planning to reduce the number of homes they rent out in the next 12 months, new research shows.
The data from the National Landlords Association’s (NLA) highlights anecdotal evidence that years of tax changes and regulatory changes are indeed having an impact on landlords.
The latest NLA research reveals that 20% of its members plan to reduce their portfolio this year, the highest level of intended property sales in 10 years.
The changes have included the withdrawal of mortgage interest relief for higher and additional rate tax payers, a 3% stamp duty surcharge on purchases of additional property and the upcoming ban on letting fees for tenants.
The NLA also reveal that research, conducted by Capital Economics, shows that landlords and tenants will pay more than their fair share in tax as a result of changes made by the Government to curb buy to let activity in the private rented sector (PRS).
To help landlords cope with the change the NLA has launched a series of videos to assess and explain the impact. They provide an overview of how the sector is likely to look as the policies come into effect and compare the tax bills of four different people all earning £50,000 through various means.
They show that landlords are paying far more tax than those earning only a wage or salary and how tenants may end up paying higher rents and have fewer rental properties to choose from.
‘The videos were created to explain simply some quite complex policies, for both landlords and their tenants. They, along with our own research, show that the Government needs to look at the impact these policies will have on the PRS,’ said Richard Lambert, NLA chief executive officer.
‘More and more people are relying on this sector for a home, so it is vital that landlords not only provide a high standard of accommodation, but are incentivised to do so by the prospects of a reasonable return on investment,’ he pointed out.
‘It is our view that these policies are undermining the viability of many landlords’ businesses and removing the incentives to invest in residential property for business purposes,’ he added.