Landlord exodus will follow Budget tax raid

Landlord exodus will follow Budget tax raid

0:02 AM, 29th October 2024, About 3 days ago 6

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A Budget tax raid on landlords will see an exodus of investors from the private rented sector (PRS), one expert warns.

Rachel Springall, the finance expert at Moneyfactscompare.co.uk, said: “The tax changes which have impacted the buy to let market have resulted in droves of landlords setting up limited companies to manage their portfolios.

“The number of limited companies set up between January and September this year was 23% higher year-on-year and 70% of new buy to let purchases in England and Wales are now made using a limited company, according to Hamptons estate agents.

“However, landlords could reach breaking point if stamp duty relief is unwound as planned next year and those facing dwindling profits may sell up, leading to a mass exodus.”

‘Avoid paying a potential rate hike of CGT’

Ms Springall continued: “There may then be a flood of sales, during a window of opportunity, to avoid paying a potential rate hike of capital gains tax (CGT).

“Landlords will be on tenterhooks to see how the upcoming Budget will play out and lenders may remain fluid with their fixed rate pricing over the next few weeks, particularly due to volatility surrounding swap rates.”

She added: “The buy-to-let market has had its fair share of challenges over the years, so landlords might find it encouraging to see fixed interest rates have been on the downward trend.

“There are also many more deals for borrowers to choose from, as lenders have been adjusting their ranges to accommodate demand.

“These are positive signs for prospective landlords, but there are numerous other factors to consider before taking the leap into the buy to let sector, not just the cost of a mortgage.”

Prediction of a landlord exodus

The prediction of a landlord exodus was made after research reveals that average fixed rates over two- or five-year fixed terms fell month-on-month.

The BTL rates have remained below 6% since the start of 2024, Moneyfactscompare.co.uk reveals.

These rates sit at their lowest levels since the start of September 2022 – plus, BTL product availability, both fixed and variable, has risen month-on-month.

Product is at highest level for over two years.

Deeper analysis shows a month-on-month rise of 40 five-year fixed deals, and a rise of 47 two-year fixed deals.


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John Gelmini

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22:15 PM, 29th October 2024, About 2 days ago

Small buy to let landlords will be eliminated as planned all along and large numbers of people will end up homeless as the overall housing targets cannot be met.
We have a shortage of 250,000 construction workers and shortages of roof tiles,bricks,cement,sharp sand,aggregates,plastic piping,roof trusses,gypsum board,timber,clay etc.The courts are still backlogged so possession hearings will be delayed well into the New Year.
Small landlords will be replaced by large corporate landlords such as Lloyds Bank Plc which will have 50,000 houses rented out by the middle of next year through a subsidiary set up for this purpose.Legal and General and others will be the new landlords and of course the government and local authorities will not be able to push them around with impunity, something which the government and councils have failed to consider properly.
To meet the Housing targets Chinese style construction methods using 3D printing or German style construction robots will be needed.
China can print 3 houses in a day and the German construction robot can build a big house in 2 days.
The elimination of small landlords will please left wing Labour MP's but not create any more houses as to build them energy will be needed.
Ed Miliband's plans to rely on solar farms and offshore wind farms and his decision to stop fracking and drilling for oil in the North Sea do not bode well for house building which will be needed to mitigate the adverse effects of the Renters Rights Bill.

Mick Roberts

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4:28 AM, 30th October 2024, About A day ago

Keep spreading something similar to this please.

Yes lot of us that's charging £200pm less than normal and everyone else, some of us are now going to have to do rent increases to pay for the forthcoming capital gains or whatever it is. I can't charge cheap rent & pay constantly ever increasing changing retrospective taxes.
In the rent increase letter, make it easy for them

Addresses
Phone number
To MP
I have just been given rent increase by Landlord and he says Due to your increased tax....
Have u any thought to those of us that were paying £2400 below anyone else? We didn't want u taxing the landlord more as it's obvious if he's looking after us, charging low etc, he can no longer do this.
Etc.

And you say working people won't get Tax hikes. Well they certainly will get rent hikes when u attack the Landlord again-Where do u think the Landlord gets his money from?

DPT

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10:27 AM, 30th October 2024, About A day ago

“There may then be a flood of sales, during a window of opportunity, to avoid paying a potential rate hike of capital gains tax (CGT)."

What window of opportunity? Does Ms Springall know something we dont, because the convention with tax rises is that the usually take place from midnight on budget day.

Old Mrs Landlord

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10:55 AM, 30th October 2024, About A day ago

Reply to the comment left by Mick Roberts at 30/10/2024 - 04:28
Sorry Mick, you may remember Alistair Campbell's statement that the Blair government "doesn't do religion", well unfortunately this current government doesn't do logic or cause and effect so I fear your argument will fall on deaf ears.

Julian Oaten-Wareham

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11:37 AM, 30th October 2024, About A day ago

I have a flat that I rent out slightly lower than market value but it is kept in very good order as soon as issues are raised they are sorted. This was to help keep my head above water when I retire as my work pension will not cover basic living cost. However now looking at what is proposed by this government I'm planning on selling meaning one less property to rent. Less tax for the government and ill be applying for pension credit in due course. So it will cost them to keep me. Where is there logic .

GlanACC

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8:30 AM, 31st October 2024, About 4 hours ago

Will cause an exodus, yes and no.

The 5% surcharge will definitely put people off from buying (especially in London where property prices are higher and the level of rent is reaching the maximum people can afford).

Those of us lucky enough to have no mortgage and have 'stable' tenants can just muddle through and hope in 5 years time this Labour shower get thrown out (however, if the past is anything to go by tax raising measures are not abandoned as the government always wants money).

There will be many overextended landlords with bad non paying renters and they will certainly exit the PRS.

There will be many landlords (like me) who will sell up when a tenants leaves

There will be many landlords that just want to retire.

Get your S21's in now while you can.

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