The CGT rise expected to be detailed in the ‘emergency’ 22 June budget called by the Coalition is expected to hike rates from 18% to 40%.
Bryn Cole, managing director of Paragon Advance, a service provider to the lettings industry, said: “There is already a shortage of housing stock and even if these properties go back into the market as residential sales, mortgages are still difficult to obtain for first time buyers.”
Cole said the prospect of an increase prompted a rush to market for sale as the previous advantages of being a buy-to-let landlord are evaporating.
Landlords should consider their longer-term goals and the rental yield potential over the next ten years, said Cole.
He said: “Although buy-to-let mortgage deals are still not great, they are getting better. This combined with the fact that rents are rising, meaning that rental yields will improve could suggest that it is worth hanging on to your property.”
He added that this may be tougher for the ‘accidental landlord’ who might eb better offer grabbing short=-term gains while they can.
and this decision will be more difficult as you may need to think short term and realise your gains while you can.”
Cole said: “We are half way there in reaching a stronger buy-to-let market with good rental yields but with the planned CGT changes it won’t go any further. At a crucial time the new government will turn it all on its head as it tried to balance the country’s books.”
