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TODAY'S OTHER NEWS

Almost one in five landlords may quit sector because of tax changes

It comes as no surprise but a survey shows an overwhelming proportion of landlords believe the government’s buy to let tax changes will damage the sector.

The research by property management group Orchard & Shipman, questioning 500 landlords earlier this month, shows 90 per cent admitting that the tax hikes will result in higher rents.

A quarter of landlords will be selling some of their properties, and 18 per cent say they are likely to pull out of the market altogether. 

The research also reveals that over 90 per cent of landlords believe they should be free to deduct legitimate costs, just like any other business - one of the main grievances about the government’s proposal to limit mortgage interest tax relief for higher-taxed landlords.

More than half of landlords surveyed said they would be raising rents in 2016 to cover the increased financing costs.
 
But Orchard & Shipman says government ambitions to make buy to let look less appealing may yet be thwarted.  

“Many landlords and property investors are committed and passionate and will do whatever it takes to protect their interests. Our research shows that the majority of landlords are looking at ways to recover the potential drop in revenue” says Shane Spiers, the firm’s chief executive.

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    I'd be interested in how they selected the participants for the survey. Last night's landlord webinar, with over 100 (professional) landlords, none were thinking of leaving the sector. Maybe it's just the "get rich quick, don't give a toss about tenants" that are thinking of leaving, which will benefit everyone.

    Mark Wilson

    I agree with David Rose, I don't believe the survey nor any of the negative scare mongering that has been going on with on line petitions and the like. and articles on this site.
    Landlords have had it too good for too long. Look at the buy to let lending figures, record highs. Landlords are still wanting to take a punt on the market for growth which is most of what buy to let is about.

     
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    I am a "professional landlord" and will not be buying anymore property. I would go as far as saying I would get rid of it all. I am not sure if you are in favour of these changes or not, but I don't think the issue is about one single change. For me its about the constant changes and changes that do not benefit anyone. Next up; here in Scotland we wont be allowed to evict a tenant if we want our property back. This will have a devastating effect when it comes to dealing with tenants on a anti social behaviour basis. Combine that with the tax changes, smoke detector changes (one hard wired alarm is now not enough), carbon monoxide changes, EICR changes, PAT testing changes, the failed landlord registration laws, soon to come in the letting agent registration. Its change change change change and a lot of it is not for the better and decided by people who have no experience in this sector. Oh and the clowns at Shelter have a huge hand in on this too. So all of these cost increases on landlords with a reduction in tax relief, its no wonder 1 and 5 want to bail or will bail from the sector.

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    Spot on Graham.
    Here in Wales we have to attend a seminar (at cost to us) and then pay to register and licence each property.
    Couple that with the proposed changes to the law with regard to minimum EPC ratings, (which will be impossible to meet for those with older properties without spending a fortune?) and a raft of other proposed legislation, then the future looks very bleak indeed.
    I don't know what your position is in Scotland, but we would just have to absorb the costs and putting up the rent wouldn't be an option, as affordability is the key in my area?

     
  • Charles Brittain

    Obviously investors are not going to be happy with additional costs from tax etc reducing their returns but lets face the realities of property as an investment class. When structured correctly the inflation beating returns property brings are far more stable over the medium to long term than most others that barely keep up with inflation. Those who structure portfolios wisely and negotiate their purchases well will continue to see exceptional returns from investment in property.

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    Will they? I for one will be shifting to investing in property abroad.

    They UK is not he only country where people rent.

     
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    Charles, I think Graham has it spot on!

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    I am a professional landlord to and agree with graham.

    The market in its current guise is going to be unsustainable due to this ridiculous discrmitary tax which rips up the fundamental taxing principles

    I have many properties and am starting to look at selling some that I can. The ones I can't I will be raising rents for the first time in 15 years of being a landlord all down to this govenment

    There maybe light at the end of the tunnel please join property 118 and help us fight this through a judicial review as barristers have found that this new tax is discriminatory as large corporations ltd companies overseas investors and cash buyers are exempt whilst induvidual landlords with mortgages are going to be taxed out of existance. This is against European human rights laws as we will be taxed heavily whilst offering the same service as the others it is important the landlord community which 99% are hardworking taxpayers need to fight this together.

  • Bland Lord

    I have worked out that if I sell 75% of my portfolio and pay off the mortgage on the remaining 25% I will earn the same income with a lot less hassle. So that is my plan for the next 2 years along with rent hikes! Tenants will have George to thank for that..

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