A new property index that tracks the fortunes of corporate landlords claims they are breathing new life into buy-to-let, while private landlords struggle.
The BRIX index, compiled by investment firm BondMason, found the average private landlord had a post-tax return of 16.9% over the past three years, but investors in corporate residential landlords have seen a return of 37.7%.
BondMason argues that corporate landlords are boosted by investment in the build to rent sector and the ability to offset debt costs against their tax bill – something now being denied to private landlords.
Stephen Findlay, chief executive of BondMason, said: “Historically the UK rental market has been dominated by private landlords, but that is now changing following the increased tax burden and new regulations which make it harder to generate a positive income each year.
“These companies are filling the gap left by smaller private landlords exiting the market, satisfying the strong demand for rental properties, particularly from first-time buyers continuing to be priced out of the housing market in many areas.
“Our expectation is that we may soon see the peak in terms of the proportion of houses owned by individual private landlords, and that proportion will start to decline, unless tax legislation is changed or reversed.”
* According to the latest lending data from UK Finance, the buy-to-let mortgage market is in the doldrums, with just 4,800 purchase loans in February, 7.7% down on the same month last year. The figure compares with 24,800 first-time buyer loans, up 4.1% year on year.