20 per cent of UK private landlords are planning to reduce their number of property investments in the coming year, according to new research from the National Landlords Association (NLA).
The findings reveal that 20 per cent of NLA members aim to reduce their property portfolio in 2018. This marks the highest level of intentional property sales in 10 years. The data highlights concerns that years of tax changes and regulatory changes are beginning to impact landlords’ finances and their attitude towards the private rental sector.
The changes introduced include the removal of mortgage interest tax relief for those who pay higher or additional rates. A three per cent stamp duty surcharge on purchases of additional properties was also added, as was an impending ban on letting fees for tenants.
The NLA also reveal that research, which was conducted by Capital Economics, shows that landlords and tenants are set to pay more than their fair share in tax due to the changes made by the government. This is due to the changes being intended to curb buy to let activity in the market.
The NLA has launched a series of videos which intend to explain the impact of regulator changes on UK private landlords. They will compare the tax bills of four different people all earning £50,000 through various means. The videos reveal that landlords are paying far more tax than those who are simply earning a wage or salary. This in turn may lead to growing rents, as extra costs are offset to tenants.
NLA chief executive officer, Richard Lambert, said: ‘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. 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. 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.’