Buy-to-let investors suffer 32% jump in losses

Buy-to-let investors have seen losses on their property sales jump 32% in the past year to top £1billion.

HMRC data on Capital Gains Tax returns reveals a leap in losses to £1.15billion from £870million in the previous 12 months, research by Bowmore Wealth Group reveals.

Key markets

David Floyd, Head of Private Clients at Bowmore Financial Planning (pictured), explains that buy-to-let investors have been hit by stagnating property prices nationwide, and by falling prices in some key markets such as London.

“BTL investors are looking at the growth in global stock markets and the high yields on UK Government bonds, and asking themselves if they should still be in an investment that has a relatively low net yields,” Floyd says.

The Renters’ Rights Act may have also prompted BTL investors to sell up.”

“The Renters’ Rights Act may have also prompted buy-to-let investors to sell up even if it means taking a loss.

“A lot of buy-to-let investors found that the administrative burden of being a landlord, as opposed to being a stock market investor, was surprisingly high,” he says.

Prices stalled

“That administrative burden and the costs of maintaining the stock left buy-to-let investors with net yields that were fairly low and were flattered by house price inflation. However, house prices have now stalled and the prices of many flats has fallen sharply.

“The new Renters’ Rights Act added an extra level of jeopardy and risk into being a landlord.”

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