According to experts, the shortage of housing in the buy-to-let sector could get worse, as more landlords decide to quit due to tax increases.
During March 2017, each letting agent experienced an average of four landlords selling up, while the figure had stood at three during February, according to a report by ARLA Propertymark. The trade body stated that the last time that the number of investors selling up had reached this level was in November last year. This had been when the government had announced that it would be introducing a ban on letting agents fees being paid by the tenant of a property.
The body also issued a warning that the extra costs incurred by landlords was likely to be passed onto tenants, with higher rents. The chief executive of ARLA Propertymark, David Cox, said:
“The market is becoming less and less attractive to investors and it appears some landlords are choosing to exit the market rather than pay the higher taxes.”
Landlords are facing higher taxes due to the increased Stamp Duty Tax on second properties, introduced last year. The government has also stated that mortgage interest tax relief will be phased out and that allowable expenses for furnished lettings will be restricted. The government also announced that letting agent fees will not be chargeable to tenants, which has led experts to believe that the costs will be passed onto landlords.
As renting becomes an expensive option for many, CeMAP qualified mortgage advisers may be able to help people get onto the property ladder, with a suitable mortgage.