Landlords remain positive despite the new budget tax reforms
- 31st July 2015
- Buy-To-Let Property News
High demand for rental accommodation across London keeps investors’ spirits up
The restrictions on landlords’ tax relief announced in the Chancellor’s Summer Budget came as a surprise to many. However, there hasn’t been a flood of buy-to-let investors looking to sell their properties, as some may have predicted immediately after the announcement.
For the first time since July 2013, rents are growing faster than house prices on an annual basis. However, buy-to-let investors need to be mindful that the recent sharp increase in rent is likely to be a bounce-back from the uncertainty caused by the lead up to election, rather than a trend that is set to continue.
Many tenants responded to the certainty created by the election result by moving into new properties or committing once again to long-term leases.
The growing demand for rental accommodation is offering encouragement to buy-to-let investors that property investments remain an attractive proposition.
Small private landlords have become increasingly important for the supply of UK housing and their influence is predicted to increase, rather than fall.
Recent pension reforms have also made it possible for over 55s to withdraw cash from their pension pots and invest this into buy-to-let property.
Stephen Ludlow, Chairman at ludlowthompson, comments: “The reforms echo policies proposed by Labour in the run-up to the election – policies that were rejected by voters; as such, the announcement came as a surprise.
“Investment in London property continues to offer greater returns than any other mainstream investment and the recent pension freedom announcements have led to a surge in the number of investors - ensuring the BTL market remains healthy.
"However, landlords need to make sure they treat the recent surge in rents with a degree of caution and not overshoot on their rental expectations."
FREE & INSTANT PROPERTY VALUATION
IN JUST 60 SECONDS