Tax relief cut is bad news for BTL
According to a new survey by Your Move and Reeds Rains, the reduction in tax relief is the reason that 50% of all landlords are currently looking to sell their buy-to-let (BTL) properties, the announced cut in tax relief for landlords to the 20 per cent basic rate has become a major factor for landlords considering whether to leave the private rented sector.
Currently 9% of landlords think it is a good time to sell up, tax reforms are influencing their decision more than any other factor. Many landlords fear that letting out a property will become far less profitable when the reforms start to come into force in April 2017, this is causing them to consider leaving the sector.
Overall, 44% of UK landlords believe investing in buy-to-let property is now more complicated than it was six months ago, a perception reinforced by the new “Right to Rent” measures that require landlords to check their tenants’ immigration status before they let their properties, almost 20% are daunted by this task, and now feel unequipped to let out their houses without the support of letting agents to manage their investment.
Adrian Gill, director of Your Move and Reed Rains, reportedly said: “If a tenth of landlords do decide to leave the industry then this would seriously shrink the number of properties available for tenants, the government need to cut the red-tape involved in providing homes for renters if they hope to maintain a healthy supply of rental properties.”