There is a prevailing mood of pessimism among landlords, despite the fundamentals for the private rented sector (PRS) remaining robust, with strong tenant demand, average yields reaching a 10-year high and the vast majority of landlords making a profit on their rental properties, new research shows.
Landlord research carried out by mortgage market specialist Pegasus Insight reveals that most landlords feel the new Labour government is anti-landlord, with 91% saying the Labour government will be negative for landlords. The top concerns cited were potential increases in taxes and costs, anti-landlord bias in government policy and loss of control over property and tenant selection.
Landlords are most concerned about changes to CGT (85%), the introduction of rent caps (79%), the removal of Section 21 no-fault evictions (73%), mandatory landlord licensing (54%) and the requirement for properties to reach EPC ‘C’ (51%).
If the government were to introduce significant changes to or reduce allowances on CGT, 39% of landlords say they would not invest further in the PRS, increasing to 48% of landlords with four or more buy-to-let mortgages. Almost 20% would sell all their properties and exit the market, 16% would sell some properties and a further 21% would consider selling some. In bad news for tenants, 26% of landlords say they would increase rents to offset potential losses in the event of a change to the CGT rules.
Only 6% of landlords say they plan to expand their property portfolio in 2025, while 41% mean to sell property next year. Leveraged landlords with outstanding buy-to-let mortgages are more inclined to sell (46%) than those who own outright (34%). The very largest landlords are most likely to divest themselves of some property, with 59% of those with 20 or more units saying they plan to sell. The main drivers for selling are concerns of possible future rental reforms, a general lack of confidence in the PRS, potential changes to the tax structure, interest rates and the threat of EPC changes.
This pessimistic sentiment prevails despite numerous positive fundamentals. Overall, 79% of landlords report strong tenant demand in the areas where they let. The upward trend in rental yields continues, reaching a 10-year high of 6.5% on average in Q3. And 70% of landlords say they are making a small profit on their rental property, while 17% are managing to turn a ‘large’ profit.
Mark Long, founder and director of Pegasus Insight, commented: “This research reveals the depth of concern over the attitude and potential actions of the new government when it comes to the treatment of landlords. This concern is all the more striking given the strong evidence that the sector is in fact thriving, despite the challenging environment it has recently weathered.
“The chancellor would be wise to heed the warning that imposing a heavier CGT burden on landlords could result in quarter of them increasing rents immediately and a sizeable reduction in the number of properties in the PRS in the near term, leading to yet more rent rises as the supply/demand imbalance worsens over the longer term.
“The PRS is vital to the housing needs of the nation, and it is crucial that this government offers reassurance and support to the landlords who provide homes for almost 20% of our population. Let’s hope this week’s Budget provides landlords with more reasons to be cheerful and confident in the government’s approach for our Q4 report on Landlord Trends.”
It’s a good job that abacus abbot isn’t a landlord otherwise it would be 12 out of 10 landlords hating liebor!
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Or David Lammy, or all landlords would be racist.
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Keep spreading something similar to this please.
Yes lot of us that’s charging £200pm less than normal and everyone else, we should be doing rent increases to pay for the forthcoming capital gains or whatever it is and 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?
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