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Punitive government legislation is causing buy to let investors to sell up, with a Belvoir report saying that in one of its branches 17 rental households have been given notice due to landlords being forced to sell.
The Belvoir report on activity from letting agents during the second quarter found that 48 per cent of landlords have sold u to three properties. This is up from 46 per cent in the first three months of this year. Belvoir also found an increase of 10 per cent in the number of landlords selling between six and ten properties between the first and second quarter of this year.
Chief executive of Belvoir, Dorian Gonsalves, suggested that these exits were as a result of tax clampdowns on the buy to let sector. He urged Chancellor Philip Hammond to introduce incentives to encourage landlords to remain in the private rented sector.
The Belvoir report also found that offices which have traded for over ten years reported a 1.75 per cent annual increase in rentals charged by landlords, with the average reaching £744 a month in the second quarter. In contrast, new offices registered just a 0.75 per cent rise, reaching £783.
He said: ‘More agents than ever before are reporting that landlords are selling up. Although government policies such as a loss of mortgage tax relief and increased Stamp Duty on second homes is hurting landlords, they still have a choice as to how to invest their money, whereas tenants have little or no choice of where to rent due to a reduction in supply. Concerns about the possibility of mandatory three-year tenancies may also influence the decision of landlords, and there are real concerns that there could be an increase in homelessness, as there is insufficient social housing to accommodate people.’
He continued: ‘We are urging the Government to do more in the Budget to address stock shortages in the UK, by incentivising the new-build sector with low maintenance homes through more Help to Buy and Buy to Rent schemes to provide more homes to own. Landlords also need rewards and incentives to encourage them to remain in the PRS, such as reversing current tax increases and introducing tax breaks, as well as initiatives such as tax incentives for landlords who buy large properties and turn them into several affordable and low maintenance flats suitable for the rental sector.’