Landlords are more concerned by tax changes and the economic climate and less worried about Brexit, at least in the short-term.
41% of landlords surveyed said they were more worried in the short-term by the tax changes, and what impact these might have on their profits.
One of the tax changes being introduced is to mortgage interest tax relief, which is being phased in between April of this year and April 2020. Individual landlords who have a mortgage on their buy-to-let property and draw an income from it will be affected. Tax relief on the mortgage interest they are paying will be stripped back to the basic rate of Income Tax, eating into their profits. However, the phasing in of the tax changes will allow landlords time to adapt and explore their options.
The figures, revealed by a survey carried out by Direct Line for Business, 40% of landlords are anxious about changes to regulations affecting the buy-to-let sector, such as Right to Rent legislation. Landlords need to keep themselves up to date to ensure they are always in compliance.
Christina Dimitrov, Business Manager at Direct Line for Business, said: “It’s great to see landlords being resilient towards the ever-changing property marketplace”.
“The continued low interest rate environment can only benefit landlords and tenants. However, experts are predicting an interest rate rise in the future and the Prudential Regulation Authority’s tougher underwriting rules for buy to let mortgage lenders may bring some challenges for landlords wanting to expand their portfolios”.
According to the same survey, almost 60% of landlords are considering renovation and refurbishment work in the immediate future, boosting the rental value of their properties. This demonstrates a continuing confidence in the rental market and a belief that demand for rental properties will continue.
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