Landlords are turning professional
More than half (58 per cent) of landlords are consulting accountants when making key property decisions, new research from Kent Reliance for Intermediaries reveals.
The study, which also showed a further 10 per cent of landlords are considering using an accountant in the future, suggests the findings are a clear sign of the increasing professionalisation of the sector.
Three-quarters of full-time landlords are currently using an accountant, while 29 per cent said they had only just started using one.
Previous research from Kent Reliance and BVA BDRC in January 2018 found that 19 per cent of landlords had recently set up a limited company in order to offset the changes to tax relief implemented in April 2017.
While incorporation can help landlords to pay lower taxes on their profits, operating through a limited company requires a higher level of detail in the accounts and, as a result, a broker would always advise the landlord to enlist the help of an accountant.
The research also found that landlords affected by recent tax changes are more likely to be looking to diversify away from ‘vanilla’ buy-to-let into often higher yielding options such as HMOs, student accommodation or commercial/semi-commercial properties.
Kent Reliance, which forms part of specialist mortgage provider OneSavings Bank, found that 51 per cent of brokers had been approached by landlords looking to diversify – 56 per cent into HMOs, 14 per cent into commercial property and 9 per cent into mixed-use.
Richard Truman, Head of Operations at Simple Landlords, welcomed the growing professionalisation of the buy-to-let sector.
He said: “This is a positive step as more landlords will benefit from professional advice about the tax implications for their business before they make important decisions. Our own research mirrors the findings of this study. As the pace of legislative change picks up, some one-off landlords are concluding that the time or money required to stay on top of things isn’t worth it for them. But for the emerging breed of professional landlord, this is a time of adaptation and expansion”