Four in 10 landlords want Capital Gains Tax changes reversed

But Jonathan Samuels, CEO of Octane Capital says the demise of the landlord has been much exaggerated, according to survey results.

Jonathan Samuels

Four in 10 landlords want recent changes to Capital Gains Tax (CGT) reversed and are demanding that the Government stop meddling in the private rented sector (PRS).

But a survey of almost 2,000 UK landlords by Octane Capital also found that confidence in the sector remains robust, despite the Government’s best efforts to reduce the financial returns available to the nation’s buy-to-let investors.

CHANGES

Government interventions by way of legislative changes remained the biggest concern for the year ahead, followed by the increasing running costs of buy-to-let investment such as maintenance and energy bills.

Six out of 10 (60%) of those surveyed also don’t believe that we’ve hit a peak where interest rate hikes are concerned and don’t believe the market will be more settled during 2023.

As a result, nearly two in 10 (16%) of those surveyed stated that they intend to increase the size of their buy-to-let portfolio over the coming year.

When asked which government legislative change they would most like to see reversed, the recent changes to capital gains tax allowance ranked top.

ALLOWANCE

The Government plans to reduce the CGT tax-free allowance from £12,300 to £6,000 in April of this year, implementing a further reduction to just £3,000 by 2024.

The ban on Section 21 evictions and required improvements to EPC ratings also ranked as some of the changes landlords would most like to see reversed.

It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated.”

Jonathan Samuels (main picture), Chief Executive of Octane Capital, says: “It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated with just a small proportion opting to reduce the size of their portfolio in 2022.

“That said, while we’ve seen a degree of stability return following a shambolic Mini-Budget last September, many buy-to-let investors remain cautious about the year ahead.

“This caution is likely to prevent them from investing further until a greater degree of certainty returns, although we must also tip our hats to the government in this respect, as their consistent attack on the sector remains the number one concern.”

RENTS DROPPED

Meanwhile, latest data from The HomeLet Rental Index reveals UK average rent has dropped for the first time since November 2021.

London rents decreased by 0.2% but continue to exceed and average of £2,000 PCM for only the second time ever.

Excluding London, average rental price is £977 PCM while the North East and Northern Ireland have seen the largest monthly variance, with averages dropping 1.4% and 0.9% respectively.

Even in the face of a minor dip, rental prices remain historically high.”

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Andy Halstead, HomeLet & Let Alliance

Andy Halstead, HomeLet & Let Alliance Chief Executive, says: “Even in the face of a minor dip, rental prices remain historically high, including December 2022 being only the second month on record in which the average Greater London rental property has been priced higher than £2,000 PCM.

“The cost-of-living crisis is continuing to bite, and the current situation is offering little to ease the fears of landlords concerned about their tenants’ ability to pay their rent.

“Tenants struggling to pay their rent is sadly likely to become a recurring theme across the country, and in turn, this could lead to some landlords vacating an already struggling market. This will likely result in a continued shortage of rental properties to meet demand.”


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