15^th Apr 2018

According to the latest research from an estate and lettings firm that shows in spite of all the tax changes that the buy-to-let sector has and is suffering from, the private rented sector is still encouraging new landlords into the market.

The stricter lending regime and tax crackdowns have not put new and existing investors off and the research's new figures from the HMRC data shows that between 2015-16 numbers of landlords rose by 5% and hit the 2.5 million mark.

The research also claims that in the last five years landlord numbers had risen by 27% from 1.97 million during 2011-12.

According to the London based agency, landlords on average own 1.8 buy-to-let properties, and has consistently risen over the past five year.

The agent believes investors are only too aware that buy-to- let returns are far better than other major asset classes, such as bonds, cash and shares.

Long-term landlords with the agents have on average over the last seventeen years enjoyed yearly returns of 9.9%.

Stephen Ludlow, chairman of the agents, said: “Rising numbers of landlords shows the enduring appeal of buy-to-let, particularly in London.

“The long-term picture for the buy-to-let market remains strong. As a ‘London-leaning’ Brexit looks more likely, a final deal will focus on strengthening the appeal of the capital as a go-to destination for overseas professionals, graduates and students alike.

“Our own figures underline the strength of London’s attraction with a significant increase in rental applicant numbers since the start of 2018. In addition, job creation in the capital remains healthy, its social scene is world-class and new, better transport links continue to come online.”

The Bank of England's recent figures also shows the confidence within the sector, as 12.7% of all mortgages in the last three months of 2017 were buy-to-let, this has however fallen over the past two years from 16.3% in 2015.

Ludlow added: “The level of buy-to-let mortgage lending shows the sector’s continued resilience considering that the 2015 level includes investors rushing to beat the new Stamp Duty. Additionally, the difference is likely to be much smaller as the figures do not include investors that have incorporated, refinanced, or made additional purchases using commercial loans.”

“Even taking into account the implementation of Government changes to buy-to-let tax relief, there are a number of tax reliefs available to landlords. Investors should also note that, historically, growing earning power and rising wages have tended to lead to rising rental values.”

Richard Merrick of PIMS, commented: "The landlord numbers is reassuring however the real effects of the ant-landlord tax measures etc may not be felt until the end of next year, we shall just have to wait and see."


News Archive »