Confidence in buy-to-let remains high despite tax setbacks
Four in five landlords are confident that their property portfolios will perform well over the coming year, new research from specialist lender Shawbrook Client Barometer shows.
One in six BTL investors said they were confident about the lending environment during 2017 - a two per cent rise from July 2016, a survey found.
Meanwhile, nearly one in three landlords reported a rise in renters when comparing the first half of 2016 with the second.
A massive 66 per cent also plan to buy an additional BTL property during the first six months of this year.
However, tax changes, which came into effect earlier this month, were an impediment to further BTL investment for around 42 per cent of the landlords polled, while around 35 per cent said that tax relief changes had affected them the most so far.
The 3 per cent extra stamp duty levy, introduced last April, was also listed as the main challenge to their businesses by 33 per cent of landlords.
Although 23 per cent said the changes to housing policy had not effected their livelihoods, nearly one in five (19 per cent) of respondents admitted they had little or no understanding of the changes.
Of the landlords who had been impacted by the changes, 57 per cent said they planned to increase rents to offset the effects, while 48 per cent planned to set up a limited company.
Karen Bennett, managing director of commercial mortgages at Shawbrook, said: “The amendments to housing policy have presented some challenges, and we may start to see wider consequences as a result, such as landlords hiking rents to combat the negative impact of such measures."
“The fact that interest rates have remained low for now means that landlords will continue to enjoy some relief, but things may change if inflation continues to go up and the Bank of England is forced to raise interest rates.
“As our exit from the EU is now officially underway, the full effects of Brexit are still unknown – however, it’s very positive to see that despite an unclear long-term outlook, Shawbrook customers continue to focus on the many potential opportunities available to them.”