The proportion of landlords in central London who intend to sell property has quadrupled since last year’s Budget, according to new research.
Just 4% of landlords in central London had plans to sell property when surveyed before last year’s Budget but new figures from the National Landlords Association (NLA) show that has risen to 19%.
The 15% increase in intention to sell property is the highest witnessed across the UK over the last six months.
Landlords with property in the North East have seen the smallest increase compared to other regions of the UK, rising from 17% in June to 24% in January.
According to the NLA the restriction to mortgage interest relief for individual residential landlords announced during last year’s Summer Budget will leave many landlords worse off, forcing some basic rate tax payers into a higher tax bracket and leaving higher and additional rate payers with considerably bigger tax bills.
The NLA has labelled the changes the Turnover Tax, because landlords’ tax will be calculated on the rental income they earn, rather than their profits.
‘Local property markets vary greatly across the United Kingdom, but we are seeing a loss of confidence across the board as many landlords realise they won’t be able to remain in the market,’ said Richard Lambert, NLA chief executive officer.
‘If landlords follow through with their intentions over the coming months this could lead to a massive sale of property, as we have previously warned. However, this may not be a straightforward process, especially for those with stock in low demand areas,’ he pointed out.
‘We urge those considering selling up to think about when they will need to do so, and to plan ahead now in order to minimise the risk of losing money as a result of a failure to sell,’ he added.
Separate research shows that 59% of landlords are shelving plans to make further investments in buy to let or even selling their existing properties with tougher mortgage rules, the stamp duty change and mortgage interest tax relief behind their thinking.
The research by property crowdfunding platform Property Partner also found that 27% of landlords had little or no awareness of the changes which are likely to affect their financial circumstances.
Some 41% of those questioned say they plan to continue buying properties for rent, 38% say they are switching strategies.
[Source:- Property Wire]