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Growing optimism as landlords act ahead of tax changes

Friday 17 February 2017

Landlords are showing growing signs of optimism as they take action ahead of changes to tax relief, a new survey from Paragon Mortgages reveals.
Despite the looming changes to tax relief and an increase in stamp duty, 22 per cent of landlords say they are more optimistic, while 65 per cent report no change in sentiment.
And the proportion (12 per cent) who still said that, compared with three months ago, they are now more pessimistic, has fallen from 18 per cent three months ago.
Nearly two-thirds (58 per cent) of landlords said they had already taken steps, or were making plans, to deal with the changes to tax relief due to be phased in from April 2017.
A quarter of landlords plan to raise rent to cover the increased costs, while 21 per cent said they will maintain their current properties, but not buy anymore, and 16 per cent said they planned to sell some of their properties, down from 21 per cent three months ago.
John Heron, MD of Paragon Mortgages, said: “We’ve reached a critical time for landlords looking to plan ahead and this is reflected in the Q4 report.
"It’s clear that landlords’ understanding of the changes has improved and that more landlords are developing a clear strategy to address the impact of the changes.
“However, despite increasing optimism, we must remain cautious. The changes have not started to be implemented yet and the full impact will not be felt for many years.”
The survey showed that 13 per cent plan to purchase BTL property in the next quarter, up from 11 per cent in Q3.
Tenant demand remains high, with 94 per cent of landlords describing the market as ‘stable or growing’.
Fewer than one in 30 landlords suggested there had been a decline. Tenant demand continues to impact average void periods, which remain unchanged at 2.7 weeks.

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