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Estate agents will be ‘biggest losers’ from buy-to-let tax changes

  • 02/03/2016
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Buy-to-let sales through estate agents could drop by up to 30% as the impact of tax changes to the sector take hold, Stuart Law, owner and founder of Assetz for Investors says.

Law, who was speaking during a panel discussion at the Paragon Great Buy to Let Debate, said a limit on how much mortgage interest relief can be claimed by landlords combined with a 3% Stamp Duty hike for second homes would prompt investors to seek more specialist advice when purchasing.

He said: “I think estate agents are probably going to be the biggest losers in this because people just buying boxes from a high street window are going to have difficulties with taxes and a structure that specialists could provide solutions to.

“I wouldn’t be at all surprised to see buy-to-let sales through estate agents experience about a 20-30% reduction to individuals. But I don’t expect buy to let in the broadest of senses to drop as much. Specialist businesses will increase dramatically, perhaps 50% or more in the next two or three years, which can offer taxation or litigation and perhaps other solutions,” Law added.

This week Countrywide, one of the UK’s biggest estate agents, purchased a ‘significant’ stake in Camberley-based distributor The Buy to Let Business, which is headed up by Ying Tan. Countrywide’s managing director Peter Curran said the investment would would enable its private rental and financial services businesses to create “a market-leading proposition for landlords.”

David Whittaker, managing director at Mortgages for Business added that the firm has predicted about £42-45bn in lending for buy to let this year.

“I wouldn’t read too much into quarter one figures, I expect quarter two to be dull, but I think that by the time we get to Q3 or Q4, we should be coming out of any trough we’ve hit. Our sales director, who always calls the numbers right, is predicting £42bn to £45bn for the market this year, so that’s about 10-12% up on last year.”

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