Buy-to-let investment has plummeted following the Government’s “attack on landlords”, according to a new report from estate agent haart.
The agent found that the number of buy-to-let transactions across England and Wales has dropped by 63.7% over the last 12 months, following the introduction of an array of measures that are putting many prospective investors off the private rental sector.
Buy-to-Let Investment Plummets Following Government’s Attack on Landlords
The report claims that the volume of buy-to-let investment, which has fallen by 8.2% in the past month alone, is unlikely to increase any time soon, unless the Government reverses recent tax increases and regulations in the sector.
The CEO of haart, Paul Smith, says: “The scale of decline in buy-to-let in just 12 months is deeply worrying – landlords have clearly pulled out of the market and are unlikely to return any time soon. However, this is entirely the result of Government policy, with Theresa May now picking up George Osborne’s baton and proceeding to bash landlords with renewed vigour.”
It has been a difficult year for buy-to-let landlords. Alongside stricter lending criteria, a 3% Stamp Duty surcharge for additional properties was introduced in April, while the 10% Wear and Tear Allowance has been scrapped, leaving landlords only able to claim for the amount that they have actually spent.
In addition, mortgage interest tax relief is due to be reduced to the basic rate of tax from April 2017.
“The Government’s attack on investors adds up to a war on landlords and a buy-to-let market crippled by tax hikes and unnecessary regulation,” Smith adds. “The effect has been to more than halve the number of buy-to-let sales in England and Wales, and the inevitable consequence will be fewer properties available to renters next year and higher rents.”
A leading housing expert has warned that families may even lose their homes as a result of the changes: https://www.justlandlords.co.uk/news/families-lose-homes-landlord-tax-changes/
Rather than punish buy-to-let landlords for a property market that is not working for first time buyers or generation rent, Smith believes the Government should channel more investment into housebuilding and increasing the supply of much-needed rental homes.
He continues: “Tenants are stuck in an intensely competitive market where rents are often more expensive than mortgages, because there are simply not enough properties available for lettings, and many landlords now have no choice but to pass the extra costs onto tenants.
“It is time for the Government to end this damaging war on landlords and instead create a market that genuinely works for everyone. The Government is casting landlords as the pantomime villains of the property market, but we need a more grown-up and serious approach to policy-making, as well as a recognition of the contribution that landlords make.”
Have your buy-to-let investment habits changed following the Government’s so-called attack on landlords?