The head of one of the country’s biggest franchise agency groups has stated that the Government’s tax assault on buy-to-let will not impact the drivers that will ultimately lead to rental sector expansion.
Ian Wilson, head of MartinCo said in a trading statement to the City, that the fundamental drivers for the expansion of the private rental sector remain in place:
- High migration
- Low supply of new housing stock
- Deposit issues for first-time buyers
- Pension reforms for over 55’s
MartinCo suggest that total returns from buy-to-let investment during the past ten months have outperformed all other asset classes. The prospect of owning a rental property to obtain income in retirement, alongside benefitting from rising capital values, remains an attractive one.
Tax changes are not having desired impact, says peer
Mr Wilson said: ‘We do not envisage the Government’s recent interventions in the buy-to-let sector significantly impacting our business. Buy-to-let investors have generally reduced gearing in their portfolios over the years since 2008 and are believed to be able to absorb rising interest rates.’
‘We are well positioned to sell investment properties if investors decide to exit and our research suggests that larger buy-to-let investors would purchase this stock. Early indications from the mortgage industry show that investors are beginning to incorporate their activities into trading companies to avoid the stamp duty surcharge and to retain the benefit of interest tax relief on buy-to-let loans,’ Wilson added.