There has been a substantial drop in the number of buy-to-let landlords buying properties following the raft of tax changes introduced for the industry.
It is unlikely that the trend will reverse in the immediate future, unless the Government chooses to cool or amend any of these alterations.
Unattractive
Investing in property has been considered a safe investment for a number of years, but the assault on landlords has made the proposition unattractive for a number of would-be buyers.
This is the view of Paul Smith, CEO of haart estate agents, who notes: ‘The buy-to-let market has been severely stung by the government’s war on landlords. In some parts of the country, especially London, a buy-to-let property no longer makes the same return it once did.’[1]
It is certain that some landlords will pass costs onto tenants by raising their tents. Experts suggest that others will consider leaving the market due to the Governments new rules, with rents becoming unsustainable for them.
Are buy-to-let investors set to move north?
Northern Lights
Mr Smith does not think that landlords with a low profit margin will leave the market, but instead concentrate more on investing for high yields. Many savvy investors have also realised that the north and not London is where the best yields can be found.
‘Investors will naturally gravitate north where values are cheaper and yields are higher-you can pick up a small portfolio of two bedroom terrace properties in Doncaster for the same price as a one bedroom flat in a new build London development,’ Smith concluded.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-landlords-will-naturally-gravitate-north-in-2017-says-agent