Two in 10 (20 per cent) of landlords plan to reduce the reduce the number of properties in their portfolio in the next year, according to a survey of the National Landlords Association’s (NLA) members.
This is the highest level of intended property sales in 10 years.
The NLA believes it is due to recent tax changes, which include the withdrawal of mortgage interest relief for higher and additional rate tax payers, a 3 per cent stamp duty surcharge on purchases of additional property, and the banning of upfront letting fees for tenants.
Richard Lambert, chief executive of the NLA, says: ‘More and more people are relying on the rental 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.
‘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.’
Commenting on the report, Simon Heawood, chief executive and founder of property investment platform Bricklane, adds: ’We will see steadily increasing outflows from the buy-to-let market, in favour of a continual consolidation of portfolios around professionalised, large scale landlords, who in turn benefit from scale advantages, tax-efficiencies, and professionalised approaches to investing and driving up tenant service provision.
‘A perfect storm is brewing for landlords looking to property simply as a financial asset. Policy makers across the political spectrum are acknowledging that home ownership is valuable because it affords permanence and security, and not just for the financial returns which placated constituents of yesteryear.’
The NLA has produced a series of videos to explain its views on the government’s tax changes, which can be viewed at Taxinghomes.co.uk.
This article was originally written by our sister publication Moneywise.
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