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Landlords call for U-turns on tax relief and stamp duty to ‘stimulate’ sector – exclusive

  • 12/08/2019
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Landlords call for U-turns on tax relief and stamp duty to ‘stimulate’ sector – exclusive
A majority of landlords believe future government U-turns on the increase in stamp duty payable on additional property and on the phased-in cuts to mortgage interest tax relief, could provide a “significant stimulus” to both the buy-to-let and private rental sectors.


When asked by Foundation Home Loans – through research undertaken by market researcher BVA BDRC carried out in June 2019 – 51 per cent of the 738 landlords asked said both measures needed to be addressed in order to help build greater confidence in the sector.

Some 22 per cent said ‘Remaining in the EU’ would give the biggest boost, while conversely 14 per cent said securing the UK’s withdrawal from the EU would help most.

Landlords were also asked whether, in the current market conditions, they would be choosing now to make their first investment in property. Four in 10 said they would still be willing to invest as buy to let remained a “good long-term investment”, provided better returns than other types of investments and they still believed property could deliver capital growth.

However, exactly half of those polled said that due to government intervention, regulatory changes, economic uncertainty, and a lack of returns, they would probably choose not to make a first investment decision now.

Just one in four landlords said they intended to increase rents over the next 12 months, while a majority of landlords believed they were renting out at least one of their properties below market rental value.

Jeff Knight, director of marketing at Foundation Home Loans, said: “It doesn’t seem surprising that the two biggest impacts on landlords over the past five years – stamp duty increases and cuts to mortgage interest tax relief – are seen as the biggest factors holding back the market. Clearly, such measures were always going to have a real influence and they have undoubtedly resulted in a large number of so-called amateur landlords either selling up, or not being able to go ahead and add to portfolios.

“On the flip side of this, we now have a sector which is much more in line with professional and portfolio landlords; utilising limited company vehicles to ensure they retain their tax relief, and where appropriate, adding to their portfolios via these structures.”

Knight suggested that this would result in a continued move towards limited company business before saying a U-turn seemed “unlikely”.

He added: “There is a continued appetite to be active in this sector and a recognition of the strong demand for quality properties from tenants. That being the case, and with a perhaps more sympathetic government ear, we might anticipate that demand for mortgage advice and buy-to-let mortgages will continue to grow, although many are clearly worried about the current economic uncertainty and what might happen in a post-Brexit world.”

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