The vast majority of residential landlords in the UK believe that the government is anti-landlord and are more concerned about changes to mortgage tax relief than Brexit, new research has found.
Landlords have already faced change to stamp duty which means that for every new property thy buy to add to their portfolios they pay an extra 3% and now are facing tougher buy to let mortgage rules and the loss of mortgage tax relief.
Some 92% think the policies from the government are anti-landlord and as a result 61% feel uncertain about the future of the buy to let sector, according to research from nationwide lettings and property management franchise Martin & Co.
It also reveals that it is smaller and newer landlords, many of whom are trying to build up their portfolios, who feel most aggrieved with the most vociferous responses from people who have been landlords for less than five years and own five or fewer investment properties.
Some 74% of landlords would like to see this year’s stamp duty changes scrapped in the Autumn Statement later this week and 50% of this group would also like the Chancellor to remove proposed changes in mortgage interest tax relief which come into force in April 2017.
However, long term landlords feel more secure within the UK buy to let sector and still make up the majority of the sector at 60%. Some 40% are new or accidental landlords and they are more in favour of more build to rent development in the UK, especially in the south east of the country.
The research also found that 56% of landlords are not worried about Brexit with just 16% saying that the decision to leave the European Union has significantly affected their plans while 25% have made changes based on the tax policies of the government. Only 39% feel unaffected by the upcoming tax changes.
Of the two thirds of landlords who fund their properties through mortgages some 41% have taken steps to pay down some of the capital in the last year and 90% plan on maintaining or growing their portfolio in the next two years, but over a third now expect to buy a property outright.
To achieve their aims over a third plan to sell other investments or savings to raise funds, while nearly as many plan to release equity from an existing investment property. This is particularly true of investors in the highest income groups.
The research found that most landlords rely on their property investments to supplement their income and that they’ve committed to property investment for the long term, with 74% never having sold a property and only 10% expecting to sell part of their portfolio in the next couple of years.
Comments from landlords indicate that they believe the government is making it more difficult at a time when more rented properties are needed to meet housing demand. They feel the government should be encouraging investment in the sector.
Ian Wilson, chief executive of Martin & Co, said: The government seems to be set on making life as difficult as possible for property investors, while ignoring the fact that landlords provide essential rental properties in locations where there are housing shortages and no realistic ability to buy.
“People are relying on the private rented sector to supply property, so we need the Chancellor to back our landlords and encourage them to continue to invest and provide a vital pipeline of homes for people who simply cannot afford to buy.”