New laws creating pessimism among landlords

A study in the build-up to the Autumn Budget revealed that 77% of landlords are not optimistic about plans for the rental sector. While this could simply be a response to the range of measures that they've been dealing with after the previous two budgets, separate research suggests that these doubts can be seen across the industry.

Punitive legislation

Survey authors Simply Business concluded that the introduction of the 3% surcharge on capital gains from buy-to-let property, the phasing-out of mortgage relief and the changes to wear-and-tear allowances have made landlords feel victimised. However, Secretary of State for Communities and Local Government Sajid Javid has already hinted that there will be further support for those who ‘do the right thing’ and offer tenancies of 12 months or more. So why are many in the sector still worried about what will happen?

Focus on first-time buyers

Despite the promise to help landlords with long-term lets, many of the government's policies have been focused around helping young people get on the property ladder. These measures are expected to include elements like tax breaks alongside more active plans such as boosting home-building to 300,000 homes per year.

While the arrival of new properties on the market will likely be welcomed by many in the industry, the focus on providing them to first-time private buyers rather than the rental market will probably be received less enthusiastically. And with 20% of buy-to-let landlords already planning on reducing their portfolio, it could mean a struggle to meet demand and standards for tenants.

Rising costs, falling profits

The wider economic and regulatory climate is also causing concern. The recent interest rate rise, combined with fresh lending criteria for portfolio borrowers, is making buy-to-let mortgages more expensive and harder to get. Meanwhile, a new bill awaiting parliamentary approval could further add to the financial side by banning letting agents from charging fees to tenants – a move that is widely predicted to shift the cost onto landlords.

There remains profit to be made, both from capital gains and rental income, but with landlords increasingly squeezed and unlikely to receive much support in the forthcoming budget, maintaining a stable cashflow is vital. To find out how Dukes Bailiffs’ ethical debt collection services can help you ensure your debts are repaid promptly, contact us today.