BTL Landlords Hit By Tough Tax Rules
More than half of the country's buy to let landlords say they've been hit by stricter tax rules, a survey reveals.
The findings from Fitzrovia Finance, a secured property lender, found that 54% of landlords say that tighter bank lending criteria and stricter tax rules has led to them selling off property.
Researchers found that 20% of landlords have reduced their property portfolio size and 15% said they had been put off from buying more homes.
Over the last two years, of those that had sold a BTL property, the average cash gain was £129,746.
Property investors are turning to real estate investment sites
The researchers also found that some of these property investors are turning to real estate investment sites as an alternative way to invest in the sector.
The firm's chief executive, Brad Bauman, said: "Our research suggests that as the buy to let sector becomes less attractive, many are turning to investment platforms which don't have the hassle of managing a tenant or having to carry out expensive maintenance."
Buy to let deals reach new high
Meanwhile, it has been revealed that the number of buy to let mortgage deals available for a first-time landlord has reached a new high.
According to Moneyfacts, the number of products in October reached 1,474 - that's 297 more than in October 2018.
The findings also reveal that lenders are working hard in a bid to expand their range to meet the needs of prospective buy to let landlords.
Moneyfacts' Rachel Springall, said: "A first-time landlord has a big choice of deals, particularly during economic uncertainty and landlords will need to watch projected profits, especially as mortgage interest tax relief will end in April next year."
'Months before tax reliefs are scrapped'
She added: "Since it's only months before tax reliefs are scrapped, it's crucial that consumers seek independent financial advice to work out whether their buy to let offers a viable investment opportunity and they should be aware of upcoming changes in the market."
The research reveals that the average two-year fixed rate for a first-time landlord product is 2.87%, while the average five-year fixed rate is 3.38%.
Ms Springall added: "Landlords are feeling the squeeze already to make a profit within the BTL sector and, according to Howsy, they will have £2,000 left from a £13,000 annual return once their costs are met.
"While some lenders are working hard to help potential investors with a range of BTL options, concerns about property market volatility and the cost to manage a property could discourage some from investing altogether."
