Landlords confident as tenant demand increases
Tuesday 14 June 2016
Confidence is beginning to creep back into the buy-to-let market after a rocky start to 2016, it has been suggested.
Paragon Mortgages claim investors and existing landlords are beginning to see some light at the end of the tunnel following a series of blows to the industry.
The buy-to-let specialists reported that 41% of second-home owners were feeling upbeat about the next quarter following a survey of 1,000 landlords.
And while that shows a 24% decline from this time last year, it is only a 2% drop from the final quarter of last year, which Paragon insists shows a confidence levels are no longer in freefall.
John Heron, the firm's director of mortgages, said: "Increased stamp duty, as well as reduced levels of income tax relief for landlords due to come into force next April, have undoubtedly impacted landlord sentiment.
"Confidence by some measures is down by around a third when compared to the same period last year. That said, this data does suggest that confidence is stabilising.
"In the previous quarter we saw more landlords respond very negatively to the announcements on stamp duty and tax on rental income with more intending to sell rather than buy property, this trend is now reversed and purchase intentions have risen.
"Likewise, although confidence remains low, the significant falls we have seen in previous quarters have abated."
Despite Chancellor George Osborne's bombshell changes, such as the stamp duty hike in April and the planned reduced levels of income tax relief from April 2017, it is felt that good old-fashioned tenancy demand could be the catalyst for a brighter future.
"Landlords are clearly taking the view that buy to let remains an attractive long-term, demand driven investment, which continues to outperform other asset classes," added Mr Heron.
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