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TODAY'S OTHER NEWS

Latest tax changes prove the ‘final straw’ for many small buy-to-let landlords

Cuts to tax relief and other rule changes are driving out smaller landlords, the latest figures show.  

Official HMRC data reveals the number of small buy-to-let landlords dropped last year, owed in part to the latest reduction in tax relief. 

According to accountants and business advisors, Moore, the number of buy-to-let landlords with five to nine properties fell to 157,000 last year, down from 159,000 the year before.

Cuts to tax relief and other increases in stamp duty introduced by the government since 2015 have been driving out smaller landlords from the buy-to-let market, as buy-to-let becomes less commercially viable for smaller landlords, with many now paying considerably more tax. 

Jonathan Green, partner at Moore, said: “For some small landlords the latest tax relief cuts are likely to be the final straw, pushing them out of the market.”

“Investment by small buy-to-let landlords has helped to improve the quality of rented properties in the UK - driving them out of the market could have a negative impact on tenants.”

“Changes to the tax regime, such as cuts to reliefs and hikes to Stamp Duty Land Tax, will always be felt disproportionately by smaller landlords. Rental profits have been squeezed to the point where buy-to-let no longer makes financial sense for some.”

Green added: “Buy-to-let landlords with smaller portfolios make up a huge part of the rental market. If their numbers continue to fall it could create a supply deficit which may result in higher rents longer term in some areas.

“Larger, more professional landlords, look to be unphased by legislative changes in recent years – bigger margins means these changes can be more easily absorbed.”

Latest tax changes prove the ‘final straw’ for many small buy-to-let landlords

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    It's not just Tax changes is it ?, section 21 threat of removal, no fees chargeable, Stupid tenancy agreements by DCLG (unusable), now they want us to tolerates dogs as pets, previously had Tenant with 2 large dogs never again, let the minister have those, Deposits debacle, 10% Wear & Tear gone, 2015 anti-private landlord Deregulation Act, when they failed with Private Members Bill. How to rent by Shelter & changed 9 times in just 5 years not required & should be scrapped, Gov' Right to Rent / unworkable / ICO, Selective Licensing schemes, Additional Licensing Schemes, Mandatory Licensing schemes, so many more things all placing a huge financial burden and work load on private LL's, we pay for all, all, all. We pay them to destroy us good isn't it.

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    Here here, the continual shift in goalposts is completely unfair. All these implications have adversely affected landlords incomes, pensions and health. This has had a negative effect, driving up rents for tenants, damaging landlords pension plans and burdening the health system. Landlords are not weak by their very nature of investment, risk, and drive to manage and provide accommodation. What I would write next is far too controversial but as we all know hidden money rolls fast and free above and below the law. Sadly most of us are law abiding sitting ducks.

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    I sold last year as I realised that the woke government does not provide a level playing field. This inept government will stumble from crisis to crisis as they do not understand strategic planning.

  • Paul Barrett

    Sinn Fein has effectively achieved power because of major issues like homelessness and massively increased rents.
    This was caused by dopey previous Irish Govts with their version of S24 which was far less onerous than the UK version.
    So by attacking the PRS the Irish Govt has effectively lost power.
    Had the PRS not been attacked by taxing turnover then LL would have remained
    The dopey Tory Govt should consider very carefully the Irish experience and consider that attacking the PRS to drive small LL out of business is perhaps NOT such a good idea!
    Apparently the dopey Irish still have rent controls which has resulted in far fewer rental properties.
    Politicians just DON'T seem to understand that any policies that cause LL to desert the market will ultimately impact detrimentally on tenants.
    LL need to be actively encouraged to invest their capital in rental properties to provide desperately needed rental accommodation for those that are in no position to buy.
    They need LL to provide somewhere for them to live.

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    Mr Foley maybe I misread your message but did you forget we are also suppose to act as immigration officers as well!

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    Yes David we are but I covered that one with Governments 'Right to Rent' same thing really.

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