Law firm reports rise in number of landlords wishing to get out after clobbering by Government

One of the UK’s largest law firms is reporting an increase in the number of private landlords wishing to reduce or sell off their property portfolios.

Irwin Mitchell says that this is a direct result of multiple changes forced on landlords by the Government, which have made buy-to-lets a less profitable investment option.

The firm warns, however, that disposing of buy-to-let portfolios will not be straightforward, with landlords being clobbered with Capital Gains Tax bills.

The law firm says that landlords have been affected not just by legal changes, but by growing public anti-sentiment being increasingly expressed in the media against the backdrop of the housing crisis.

In recent months, landlords have seen more stringent mortgage lending, particularly for those with four or more properties; the introduction of the 3% Stamp Duty surcharge on the purchase of buy-to-let properties; the phasing out of the ability to claim mortgage interest against tax; and the spectre of a Labour party pledge to introduce rent controls.

Jeremy Raj, partner at Irwin Mitchell, said: “It’s understandable that landlords who have been hit with some difficult changes to swallow, are now thinking of exiting the buy-to-let market in order to invest elsewhere.

“We’ve certainly seen an increase in enquiries from landlords worried about the future market.

“However, the CGT liability that will crystallise on each property sale must be factored in when weighing up whether it is best for landlords to divest of their property portfolio.”

He added: “If the Government really wants to help young people on to the property ladder, it needs to combine the recent disincentives in the buy-to-let sphere with fulfilling its promises to get more housing built.”

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8 Comments

  1. DanieLatto

    It’s not surprise is it ?

    A continued attack on the PRS means landlords are being targetted indiscriminately for having an alternative to a pension.

    All this means is that less housing available to be rented, and rents to go up thus  harming those struggling to survive at the lower end.

    Combine this with the reports of homelessness increasing and it’s obvious that Section 24 is directly to blame for homelessness.

    We told you this would happen over and over again – but nobody listened.  So here we are.

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    1. Barry20

      The Government has listened & knows EXACTLY what it is doing/has done. It also knows what the outcome will be.
      The real question is what is their real/hidden agenda?

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  2. James

    It is a cross party stance to attack the PRS so ALL politicians, and not just the government, should hold their heads in shame. Housing in this country in going to get beyond ‘a crisis’ in the coming years as a direct result of hounding Landlords away. Supply with reduce dramatically, rents will go up…..eventually the policies will be reversed to tempt Landlord’s back.

    This isn’t ‘rocket science’……and our leaders are supposed to be intelligent, forward thinking people….. God help us all!

     

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    1. Barry20

      Absolutely , and they have been told of the same policies in Ireland.

      So why are they still pressing ahead when these intelligent people know full well what is going to happen?

      Could it be it be they’re just toeing the party line?

      Could it be they don’t what to rock the party boat?

      Could it be they don’t want to jeopardise their ministerial ambitions?

      Could it be they want help big corporate donors moving into BTR?

      OR ALL OF THE ABOVE

      For sure they don’t give a flying f**k for Tenants or small Landlords.

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  3. Angus69

    That does not really surprise me, the government has been single-handedly targeting landlords since George Osborne thought that there was an opportunity to target a profitable sector that does generally not receive much sympathy from the general public. I think this will have an effect upon renters as landlords look to recoup their costs elsewhere.

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  4. eltell

    The hidden agenda here is the government’s plan to move the PRS into the hands of the corporate insurance/pension fund operators who can be controlled easier and are more transparent.  ‘Build to Rent’ is the next Big Thing and will be achieved at the expense of small private landlords and their agents.

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  5. Deltic2130

    I agree with all the above comments, but am becoming increasingly interested in the success or otherwise of BTR. Whilst I am sure funky new student blocks will be filled easily enough, I doubt the wisdom of some of the new blocks. One near me – the first one in my town – is half empty after nearly a year of availability, so much so that there are huge banners begging people to rent from them. The private car park is so empty they’re offering it to the general public for £4/day – almost half the cost of the nearby council car parks. The rents in this block are around 25% above the local market – as most BTR is – so any ideas that a plastic bench on the roof or an on-site caretaker was going to be a major attraction have been proven somewhat wide of the mark!

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    1. Barry20

      Just about every BTR development I’ve seen is targetting the “young professional” market or students. The BTR operators are not interested in low-income families or those on Housing Benefit – too little profit and too much hassle.

      They want the cream not the milk, what they haven’t realised is that there is not that much cream on top of the milk to go around.  So they lobbied (euphemism for bribed with donations/non-exec Directorships) their Tory mates to hammer private Landlords to give them an easier ride. This is exactly what the Tories want and if some HB Tenants get evicted along the way so what!

       

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