Landlords with buy to let properties are so fed-up with the coming changes to the sector that one in five is planning to leave, according to a survey.
The findings by property management group Orchard and Shipman also reveals that 90% of landlords believe the changes to the tax regime will lead to a rent hike for tenants.
In addition, one in four landlords say they will be selling their properties because of the changes which include limiting mortgage interest tax relief and changing the rules on claiming legitimate costs from rental income.
As a result, more than half of the 500 landlords questioned said they would be increasing rents this year to cover their growing costs of running buy to let properties. This is a worrying point for tenants who are already seeing their monthly rental costs increasing year on year.
The chief executive of Orchard and Shipman, Shane Spiers, said that the government’s aim to thwart the buy to let sector may yet fail.
Property investors and landlords are passionate
He explained: “Many property investors and landlords are passionate and committed and they will do what it takes to protect their interests.
“Our research also shows that most landlords are looking at how to recover the potential revenue drop.”
Mr Spiers added that he believed that the UK’s buy to let market will work to provide the desperately needed rented accommodation to help meet the growing demand from tenants.
The survey comes hot on the heels of research conducted by the Residential Landlords’ Association (RLA) which also revealed that 25% of buy to let landlords are planning to sell some, or all, of their properties.
Each buy to let landlord owns 2.5 homes
The RLA says that, on average, each buy to let landlord owns 2.5 homes which could see around half a million properties being put up for sale over the coming five years.
The result of so many homes being put on the market will, according to an economist at Capital Economics, drag down house prices.
Even if landlords drip feed their properties for sale onto the market that could mean an extra 10,000 properties coming up for sale every month which would push down asking prices.
The RLA’s chairman, Alan Ward, said the government had changed the rules for landlords so they were paying tax on their turnover and not on their profits.
He warned: “For many landlords, the changes will scupper their business models so it’s no surprise that so many want to sell.”
Rents will increase
Another survey, this time from the National Landlords’ Association (NLA), has calculated that rents will increase by between £29 and £113 every month.
However, the biggest hike in rents will be seen by tenants in London, says the NLA, where landlords will need to push up rents by 10% to cover the additional costs under the changes.
With the average rent in London currently £1,134 per month, many tenants will be facing a hefty rent hike to remain in their home in 2016.[vc_row][vc_column][vc_separator][vc_column_text]
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