A new survey has revealed that the Chancellor’s policies intended to slow buy-to-let growth are actually leading to increased pressure on the sector.
Research carried out by Belvoir shows that despite 68% of landlords surveyed not raising their rents during the last year, 86% think that larger purchasing costs for investment properties will leave them with no choice but to put rents up in 2016.
Managing Director of Belvoir, Dorian Gonsalves, explained, ‘the survey ran from mid December 2015 to mid-January 2016 and we invited all landlords, not just those who are clients of Belvoir, to respond to an on-line questionnaire. We received a total of 1,038 answers and many of these concurred with Belvoir’s predictions at the start of this year.’
The vast majority of respondents were investment landlords with between one and ten properties. 93% of these rental properties were in England.
‘When we asked landlords how changes to stamp duty and taxation were likely to influence their investment plans for the next 12 months, 44% responded by saying they will be adopting a cautious approach to further investment,’ Gonsalves continued.
‘A total of 68% of landlords had not increased their rents at all in the last 12 months and almost half of those surveyed have no plans to increase rents in the next 12 months.’
Chancellor’s measures to harm buy-to-let sector, report shows
More ominously, 88% of landlords feel that higher purchasing costs for their investment properties as a result of the tax changes will lead to increased rental costs.
‘Landlords are almost equally divided in their views as to whether they think BTL remains a good investment for new people coming into the market. A total of 46% thought it would still be a good investment and 40% thought it would not, with 14% undecided,’ Gonsalves explained.
‘The majority of landlords named George Osborne’s anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with my prediction that increased Government interference in the BTL market will put a real squeeze on the supply of property in the rental market in 2016 and beyond,’ he concluded.