Labour risks pushing the current rental crisis beyond repair, a lender claims.
With Chancellor Rachel Reeves reportedly planning a capital gains tax raid on landlords in the October Budget, Octane Capital commissioned a survey of UK landlords to gauge current sentiment within the sector.
The survey found that 66% of landlords have already reduced the size of their investment portfolio in the past year, with reduced profitability due to previous legislative changes cited as the primary reason for these reductions.
The proposed rental market reform which includes the ban to Section 21 notices also placed highly along with the inevitable increase in age, as many approach retirement.
Half of those surveyed also stated that when it came to their investment into the rental market, they feel less confident under the new Labour government and as many as 75% said that they are concerned that the current Government may equalise capital gains tax in line with current income tax thresholds in the Budget.
If this change is implemented, 58% said that it would spur them to reduce the size of their buy-to-let portfolio as a direct result.
Additionally, 30% also stated that they plan to reduce their portfolio size anyway, with a reduction in profitability again cited as the driving factor behind this decision.
Jonathan Samuels, chief executive of Octane Capital, said: “It seems that our new Labour government is picking up where its predecessors left off within the rental market landscape, driving legislative changes designed to deter landlords from the sector.
“It’s quite worrying to see that such a large proportion have reduced their portfolio size over the last year, with more planning to do so should the proposed changes to capital gains tax come to fruition.
“A tenant-first approach is all well and good but the key factor driving the current rental crisis is the lack of available stock and by further penalising landlords, Labour are set to push the current crisis to breaking point.
“Raising rental market standards is an admirable endeavour, but without the homes themselves, rental prices will continue to spiral and it’s tenants that will pay the price, either financially or otherwise.”
