Private landlord ‘exodus’ revealed in official CGT figures – claim
Thousands of landlords are leaving the PRS as proved by latest Capital Gains Tax returns says leading wealth management firm.
An exodus of landlords leaving the buy-to-let industry is signalled by new government figures, a wealth management firm claims.
Quilter says that data on Capital Gains Tax reveals a host of landlords selling up as they react to increased mortgage rates, PRS reforms and EPC requirements.
The figures from HMRC show 139,000 taxpayers reporting 151,000 disposals of residential property in the 2022/23 tax year amassing a total liability of £1.8 billion, which is much larger than two years previously.
This data suggests that there is an exodus of landlords from the property market.”
Rachael Griffin, tax and financial planning expert at Quilter, says: “This data suggests that there is an exodus of landlords from the property market as the tightening of tax laws on buy-to-lets make them a more unattractive investment.
“Coupled with this the continuing high property values but simultaneous threat of a property price crash is seemingly making more landlords opt to sell up.”
Sky high
Griffin says it is yet to be seen how this ultimately impacts the market for all prospective buyers and renters.
“Currently property prices are slipping slowly, but rent remains sky high as renters compete for a dwindling stock of rental properties,” she says.
The Bank of England raised the base interest rate again yesterday to 5.25%, which could mean mortgage rates are raised even higher.
Rents are at record levels, but many buy-to-let landlords are finding the figures still don’t add up, making it difficult for them to achieve an income from their properties.
The Government’s Renters’ Reform Bill is currently passing through Parliament, including a ban on Section 21 ‘no fault’ evictions.
‘Thousands of landlords selling up’ in face of EPC challenge
With the growing pressure on the housing market to supply more homes for rental, is it not worth at least considering other ways to release private investment and capital expenditure back into the market. I appreciate this may have a knock-on effect on inflation over the short term but it would potentially also unlock billions of pounds of tied up funds.
There is without doubt serious concern at the lack of social and private rental properties coming to the market. With less social housing being built and more private sector landlords leaving the market this is leaving a massive shortfall in the supply compared to demand in the market, this will only get worse over time and lead to further increases in rents. The simple fact is as demand continues to grow over supply the only loser will be the tenant.
How to address this problem is not easy without spending literally billions. But surely there is a way to release billions to the market and boost the private rental sector significantly, the effect of this would be to increase supply to meet demand, at least stemming, if not halting the increase in rents across the UK, where in many places they are simply unaffordable for the average person.
There are billions, if not trillions of pounds tied up in private pensions, SSAS and SIP pensions. I understand there are rules governing the use of these funds and the owners of these pensions are able to use this pension money to buy commercial property without suffering any loss in taxes. If this is incorrect then my information is wrong, but I have researched this and believe it to be the case.
Why are these pension holders given the ability to buy commercial properties, which are generally full repairing tenancies to the benefit of the landlord and not residential property, which are full repairing tenancies to the benefit of the tenant.
If the Government and HMRC were to relax the rules on SSAS and SIP pension funds it would bring a huge amount of investment into the residential market, this would help support the property market which is crucial to the economy and stimulate the rental market relieving the pressure on rent increases. Private pensions would, I’m sure, invest in buying residential property, this would bring potentially tens of thousands of new residential rental properties to the market hence taking the strain off the Government to build more homes, but more importantly take the pressure off ever increasing rent hikes due to the supply being enhanced to meet the demand.
Just an idea, which I have sent to a bunch of MPs to consider.
Government will learn the extent of ‘Unintended Consequences’ – when it hits tenants ( and local Authorities ! )
I am currently selling 3 properties. The local council has forced me to evict 1 tenant as the rent is under water & won’t make a grade c.
What a surprise! Proof, as if it were needed that the Marxist pressure groups supported so enthusiastically by UK Labour & the Tories are systematically decimating the private rental sector and in doing so are directly forcing up rents for the tiny number remaining. Instead of targeting Social Housing where the real problems lie they, and the politicians are going for the easy targets who have actually been providing an excellent service. Until they back off & concentrate on seriously punishing the small minority of criminal landlords & make all the appalling Housing Associations equally accountable, the problem will become a true human disaster for which they are all entirely responsible!