Despite concerns that private landlords are planning to flee the buy-to-let market, thus reducing the supply of much-needed housing in the sector, new research suggests the vast majority of those who already own investment homes remain committed to keeping them.
The latest insight from specialist property lending firm, Octane Capital, has revealed that confidence in the sector remains robust, despite the government’s meddling with the sector, with higher taxes reducing the financial returns available to buy-to-let investors.
In fact, just 8% of those surveyed stated that they had reduced the size of their buy-to-let portfolio over the last year.
However, government interventions by way of legislative changes remained the biggest concern for the year ahead, followed by the increasing running costs of buy-to-let investment such as maintenance and energy bills.
Some 41% of landlords surveyed said they would like to see recent changes to capital gains tax (CGT) allowances reversed, with the government’s interference in the sector also the biggest concern, along with the increasing day to day cost of buy-to-let investment driven by the cost of living crisis.
Some 60% of those surveyed do not believe that we have hit a peak where interest rate hikes are concerned and do not believe the market will be more settled during 2023.
As a result, just 16% of those surveyed stated that they intend to increase the size of their buy-to-let portfolio over the coming year.
When asked which government legislative change they would most like to see reversed, the recent changes to capital gains tax allowance ranked top.
The government plans to reduce the CGT tax-free allowance from £12,300 to £6,000 in April of this year, implementing a further reduction to just £3,000 by 2024.
The ban on Section 21 evictions and required improvements to EPC ratings also ranked as some of the changes landlords would most like to see reversed.
The CEO of Octane Capital, Jonathan Samuels, said: “It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated with just a small proportion opting to reduce the size of their portfolio in 2022.
“That said, while we’ve seen a degree of stability return following a shambolic mini budget last September, many buy-to-let investors remain cautious about the year ahead.
“This caution is likely to prevent them from investing further until a greater degree of certainty returns, although we must also tip our hats to the government in this respect, as their consistent attack on the sector remains the number one concern.”