Will buy-to-let crackdown actually harm renters?
Many landlords plan to sell up when tough new legislation takes effect, but who gains?
The number of landlords planning to sell up has surged to a ten-year high, as tax changes cracking down on buy-to-let take effect.
Research conducted for the National Landlords Association (NLA) shows that 20% of members plan to reduce the number of properties in their portfolio in the next year – the highest level of intended property sales since the financial crisis a decade ago.
“It follows a series of policies to curb buy-to-let activity in the private rental sector,” says The Independent. These include the withdrawal of mortgage interest relief for higher and additional rate tax payers, a 3% surcharge on purchases of an additional property, and the introduction of a ban on upfront letting fees for tenants.
Under further changes announced by the Chancellor in last year’s budget, landlords will also have to foot the bill for tenancy agreements, referencing and credit checks.
Tough new legislation combined with “a weakening housing market and increased difficulty in obtaining mortgages have all made buy-to-let a less attractive investment”, says The Daily Telegraph.
The chief executive of the NLA, Richard Lambert, said that with “more and more people relying on this sector for a home, 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”.
He said current government policies, while politically popular, “are undermining the viability of many landlords’ businesses and removing the incentives to invest in residential property for business purposes”.
The changes could actually harm renters says Property118, “with tenants ending up paying high rents and having fewer rental properties to choose from”.
Last August, a survey by Britain’s biggest landlord organisation, the Residential Landlord Association, found almost half of private sector landlords plan to increase rents over the next year.