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TODAY'S OTHER NEWS

Landlords take a ‘long-term performance view of their portfolios’

The reversal of controversial alterations to mortgage interest relief and the scrapping of the 3% stamp duty surcharge on additional properties understandably top the wish-list of changes that private landlords would like to see announced in next week’s Budget, but most landlords will continue to adopt a long-term investment strategy despite what the Chancellor announces, a new study suggests. 

Some people had anticipated a mass exodus of BTL landlords amid tax reforms and tighter regulations, but this seems to have been an exaggerated view of the market, according to fresh research by Upad.

The online letting agents surveyed its database of landlords to expose the issues concerning landlords and how they intend to react to what may, or may not, be announced in the Autumn Budget, which is set to be delivered on Monday 29 October.

When asked what one wish Philip Hammond could grant next week, 40% of landlords chose a review of recent changes to mortgage interest relief, whilst just over a quarter - 26% - would like to see the 3% surcharge on SDLT applied to second and subsequent property purchases reversed.

However, should neither of these come to fruition, the landlords surveyed do not intend to make any rash decisions regarding their future in the market.

Almost a third - 30% - stated that they are a committed landlord and take a long-term view on managing their portfolios; a further third (32%) would adopt a ‘wait and see’ approach to better gauge how they might be affected.  Just 7% would take steps to start selling their properties.

James Davis, CEO of Upad and himself a portfolio landlord, commented: “The decision to sell up isn’t instantly achievable and landlords need to factor in serving notice on tenants and possible renovations before tackling all the normal marketing and conveyancing hurdles.

“Realistically you can be looking at a twelve-month timeframe to sell a rental property so whatever happens next Monday, we’re unlikely to see that happen quickly.

“Added to that, however, is that our landlords take a long-term performance view of their portfolios.

“Over three-quarters of our respondents have been a landlord for more than five years and added to this, the clear majority have a very clear strategic reason for being so: for two-thirds, it’s a vital part of their pension planning, whilst for a fifth it’s their full-time job.  This isn’t something that they’ll simply walk away from.”

Upad also questioned landlords about the government’s plans to introduce a capital gains tax incentive on the sale of rental properties to sitting tenants of three years or more, with 37% of respondents  saying that this is something that they would welcome. But 33% confirmed that they were not looking to sell, so it would not affect them.

Davis added: “With 71% of our respondents confirming that they’ll maintain the size of their property portfolio in the coming year and a further 15% stating that they, in fact, plan to increase the number of properties they hold, committed landlords with a long-term, strategic view of their investments are unlikely to be deterred by whatever the Chancellor announces next week.

“They’re keen to maintain a cost-effective approach to managing their portfolios which is why they chose to work with Upad, but they also resent the burdensome nature of the tax regimes inflicted on them.  However, they’re aware of the vital role they play in the provision of homes when supply is so low, and demand is so high, so they remain resolute in their commitment to the Buy to Let market.”

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