The Intermediary Lenders Association (IMLA) has called for a moratorium on any further Government intervention after its research found the private rental sector (PRS) is still absorbing recent regulatory and tax changes.
Landlords have been hit with extra stamp duty charges, the end of the wear and tear allowance and the rolling back of mortgage interest relief in recent years.
Further changes, IMLA warns, could adversely affect much-needed tenant choice and potentially raise rents.
It analysed the government’s 2018 English Private Landlord Survey, which showed professional landlords now represent 48% of the PRS, up from 38% in 2010, while the number of single-property landlords make up just 21% of the PRS today, down from 40% over the same period.
IMLA blames this trend on a constricted mortgage market, a move towards large institutions investing in build-to-rent accommodation and predominantly due to the government making small-scale property investment less profitable.
The 2018 English Private Landlord Survey found that of those landlords planning to sell some or all of their properties, 61% cited legislative changes as the reason.
IMLA said this is evidenced by buy-to-let mortgage lending increasing from £4.5bn in 2009 to £15.6bn in 2015. But since then, purchases have fallen by more than 40% to £9.1bn. At the same time, remortgaging has increased, up 25% since 2015, from £22.3bn to £27.9bn.
Kate Davies, executive director of IMLA, said: “We are concerned that layers of government intervention have adversely affected small-scale landlords’ ability and appetite to invest in properties over recent years.
“As increased tax and regulatory responsibilities increasingly dis-incentivise landlords, we face a possible topping out of the PRS. While it’s good to see professional and institutional investors increasing their stake in the nation’s housing stock, the number of one-property buy-to-let investors has fallen by almost half.
“Squeezing the PRS puts the pressure on millions of renters in Britain. We are strong advocates of a fair market with a quality supply of homes. Restricting the PRS risks a lack of supply, rising rents and a fall in the quality of rental accommodation.
“We have repeatedly called for Government to put the brakes on regulating and taxing our nation’s landlords. We urge a more moderate approach to ensure our private rental sector remains strong for the millions of renters who rely on it.”