Government tax changes are starting to bite in the buy to let sector, but it looks as if career landlords are unfazed. Research carried out by Countrywide has found that the average buy to let property investor now owns more homes in his or her portfolio.
There are fewer landlords in 2017 compared to 2015 and some 154k landlords have left the buy to let sector. This may be because of the punitive 3% Stamp Duty on second properties, or even because mortgage interest tax relief is being phased out over five years, but what is really interesting about the Countrywide study is that the number of rental homes has increased during the same period.
Government Tax Changes
In 2015, there were 4.9 million private rented homes in the UK. Today, there is 5.1 million buy to let properties. This is surprising, as many experts predicted that the rental market would shrink in response to government tax changes. However, while many smaller landlords have indeed exited the property market, career landlords have expanded their portfolios.
London landlords are the most likely to have larger portfolios, closely followed by landlords in the North East and Yorkshire and Humber.
PRS Favours Experienced Landlords
Increased buy to let sector regulation and changes to income tax relief seem to be favouring career landlords, who are more experienced and are therefore better able to cope with the changing climate in buy to let.
However, despite the seismic shift in the sector, most landlords still only own one property.