Every action has a reaction and that’s exactly what’s happening in the private rental sector. The Government has been making significant changes to the buy-to-let market, making it less profitable, so landlords are leaving the market.
Various tax changes and new regulations have affected the market in the last three years, resulting in an estimated 120,000 properties being sold by landlords over the last two years.
The changes include a 3% stamp duty surcharge for additional properties, an end to the wear and tear allowance, a tapering off of mortgage interest tax relief and a ban on charging fee to tenants. It’s no wonder many landlords are feeling the pinch and are choosing to the leave the market.
This also affects rental prices – a mismatch between supply and demand will drive rents up, as will the increased costs faced by landlords who remain in the rental market.
So, it’s not good news for renters who face less choice and higher prices. It’s not good news either for landlords who aren’t making the gains they were expecting. The only people it might be good news for is first time buyers who could have more choice of properties.
The lettings market is becoming complicated for landlords, many of whom are falling foul of the rules and regulations, without realising why. The award-winning smarthomes’ lettings team are on hand for advice and assistance.
See how the smarthomes’ lettings team can help: