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Buy-To-Let Interest Maintained Despite Tax Changes

property

Unphased by some of the major changes in tax this year, it has been reported (in recent research) that the majority of UK property investors (circa 56%, in fact) are resolute in continuing with plans to purchase further buy-to-let assets over the course of the next year. The news is, as expected, regarded as a bold move for such investors with reference to the previously reported market changes which will make it even more difficult for buy-to-let properties to effectively turn a profit (many reported to even have losses predicted).

Of course, those looking to invest aren’t just diving in head-first, and it is instead reported that many are taking a responsible approach to their investment, with many establishing themselves as limited companies so as best to minimise the impacts of this year’s tax changes (circa 40%). Additionally, many other investors have laid out plans to increase rents at their properties to ensure a level of profitability also (some 33%).

Yet, naturally, some investors have taken heed of the changes to both stamp duty and tax relief, taking a more cautious approach to their investment plans. Of those which have stated not to be securing any additional buy-to-let assets this year (the remaining 44%), a large portion (20%) attributed this to caps placed on tax relief, whilst most of those remaining (16% in total) referred to the changes made to stamp duty as one of the key causes of concern.

However, following on from our recent nod to the industry changes, the news is well received, with a shade more confidence in the sector than was originally predicted. Naturally, the prospects highlight an unforeseen continuation in opportunity for industry lenders, who will be able to continue benefiting from the considerable interest in buy-to-let properties and commercial mortgages. How long this trend is to continue, however, is hard to say.

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BDC 316 : May 2024