11th
Feb 2022
A finance company’s chief executive predicts there is a real threat of the government raising Capital Gains Tax and warns the Tories against any introduction of the ‘draconian’ measure.
The company’s C.E, says: “The government has tried its hardest to dampen investment into the private rental sector in recent years, with a string of legislative changes around tax relief, stamp duty and tenant fees reducing the profitability of buy to let investments.
“The pandemic has also proved problematic for some landlords who have suffered lengthy void periods due to factors such as the tenant eviction ban and a reduction in rental demand across our major cities, in particular.
“Despite all of this, the sector has stood tall and continues to provide the vital rental market backbone that so many are reliant on.
“At the same time, the nation’s landlords have benefited from a considerable level of capital appreciation on their buy to let investment and the value of the sector as a whole has increased substantially.
“Let’s just hope that whisperings of a higher rate of capital gains tax remain just that, as any further increase could spur a reduction in available stock, causing the total value of the market to decline.”
The comments follow the company’s research which found that the UK’s private rental sector’s worth has significantly increased by £240 billion since 2017.
The finance company analysed the level of rental housing stock across all UK regions and says there are around 5.5 million UK PRS properties. By using current market prices it estimates the total value of the housing stock is close to £1.7 trillion.
London’s PRS homes make up 19 per cent of the UK total with one million rented ‘residences’ and obviously has the highest property values in any other region at more than £500 billion.
The South East is second placed with a total BTL value of £247 billion which far exceeds the £100bn worth in the East of England, South West, the North West and the West Midlands.
The company has also estimated that the UK’s BTL market has increased since 2017 by an extremely healthy £239 billion –
16.9 per cent.
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