Buy-to-let investors feel hard done by when it comes to tax, with almost half of all landlords planning to quit the rental market by 2020 when mortgage tax relief has been completely phased out, according to a new study of UK landlords.
Fresh research by AXA reveals that more than 40% of landlords believe they will be worse off as a consequence of the tax changes which come into effect from today, with two-thirds of landlords surveyed insisted that they feel stigmatised for running a rental business.
One in five (21%) landlords surveyed said that they plan to sell all their rental properties, 10% will reduce their portfolio, and 7% will switch to commercial property ownership, which is perceived by some property investors as a safer option.
A further 8% say they will transfer ownership of their rental property to their spouse or other family member who is in a lower tax bracket as a way of avoiding extra tax.
Gordon Rutherford, head of marketing at AXA Insurance, commented: “Landlords have been subject to one piece of new legislation after another in recent years, much of it very complex indeed.
“We see a real confusion as to what the new tax changes will mean, with government and landlords giving very different estimates of the impact.
“We need to remember that few landlords are professional property tycoons: two-thirds in the UK are ‘accidental’ landlords. They tend to own just one rental property that they’ve inherited or are finding hard to sell, and they make a modest income once time and expenses are out. They do feel increasingly apprehensive, as we can see from the numbers thinking of withdrawing their properties from the rental market in the coming years.”