Will regulations force many out of BTL sector?

Yet another investigation into the current state of the buy-to-let market has suggested there could be a gloomy outlook for landlords.

Research by The House Crowd has indicated that buy-to-let investors are predicting a rocky road in 2016. 72% said that the forthcoming legal changes will have a detrimental effect on their investments.

What’s more, one-fifth of landlords plan to sell their properties during the course of 2016.

Changes

Instead of looking on their properties as a solid form of investment for the future, buy-to-let purchasers are becoming increasingly concerned that they are being targeted by the Government. With features such as the Mortgage Credit Directive and the increase in Stamp Duty coming into play in March and April, it is hard to argue.

Results from The House Crowd survey found:

• Half of investors stated their retirement plans are now at risk to the changes
• One-third said it would now become harder to support their children or grandchildren to get on the ladder
• 38% stated that landlords should look at better ways of investing
• 43% felt that the Government is trying to get rid of smaller landlords

Will regulations force many out of BTL sector?

Pressure

‘Property investment has long been viewed as a sensible way for the shrewd small investor to save for the future, making life a bit more comfortable and paving the way for a financially secure retirement,’ noted Frazer Fearnhead, founder of The House Crowd. ‘However, these new regulations are putting increasing pressure on those who own perhaps two or three properties, making it very difficult for smaller landlords to remain in the buy-to-let sector.’[1]

‘I’d encourage investors to look at newer options to help them remain in the game, like property crowdfunding-there is another way,’ he added.[1]

[1] http://www.propertyreporter.co.uk/finance/will-new-regulations-force-investors-out-of-btl-this-year.html