Landlords are cautious about their future Investment plans for 2016 as a result of numerous Government policies which have aimed to slow down the UK buy to let market.
86% of landlords believe that increased purchasing costs for investment properties will most likely lead to increased rents, a survey by lettings agency Belvoir has revealed.
A rise in stamp duty and lack of buy to let mortgage tax relief will be the biggest reasons behind rent hikes.
However, 68% of landlords revealed that they had not raised their rent in the last 12 months and almost half of those surveyed do not plan to increase rents in the next 12 months.
46% of landlords still consider buy to let to be a good investment, 40% think it is not and 14% are undecided.
The majority of landlords surveyed owned between one to 10 properties and 93% of these properties were located in England.
44% revealed that they will be adopting a more careful approach to further investment as a result of the impending changes to legislation.
Some landlords predict that the Government’s drive on home ownership will lead to a slowdown on the rental sector. However, others predict that there will be a minimal effect as many people are not in a position to buy their own homes and many others prefer the freedom that renting offers.
Despite changes to stamp duty and tax allowances, there are strong capital growth opportunities for investors in cities such as Cambridge, Belvoir has revealed.
“The majority of landlords named George Osborne’s anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with our prediction that increased Government interference in the buy to let market will put a real squeeze on the supply of property in the rental market in 2016 and beyond,” said Belvoir managing director Dorian Gonsalves.
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