The private rented sector will not experience a “mass exodus” of private landlords as a result of tax changes and tougher mortgage rules, a senior figure at Foundation Home Loans has insisted.
A recent study, undertaken by the National Landlords Association (NLA), suggests that almost a fifth of landlords - 19% - plan to exit the PRS this year amid tax changes, including the phasing out of mortgage interest relief.
The survey of more than 1,000 private landlords suggests that a perfect storm of increasing demand from renters and landlords selling up will have a major impact on the market, which will inevitably place upward pressure on rental values.
But Jeff Knight, director of marketing at Foundation Home Loans, believes that claims that there will be a mass departure of landlords is misleading and simply a “dramatic view for market”.
He commented: “A mass exodus may be an exaggerated view of the market. While the potential for thousands of homes becoming available for first-time-buyers is what the market needs, we have to consider the fact that firstly, not everyone is in a position to buy and secondly, it’s important that good landlords don’t make a knee-jerk reaction to exit in the face of the wave of tax and regulatory changes.
“Yes, the cut to stamp duty was a huge leg-up for first-time buyers, but we need to ensure there is quality property available for those who have not quite been able to get over the line or do not find the idea of buy-to-let appealing.
“Buy to Let has certainly become more complex over the years, but seeking the help of a financial adviser will help landlords to navigate the hurdles, professionalise their approach and ultimately play their role in the stepping stone to ownership.”