In a recent interview with Patrick Collinson of the Guardian, Britain’s largest private landlord said he believes that the days of small buy-to-let landlords are numbered and that buy-to-let lending will fall 20 per cent next year due to higher taxes and borrowing constraints.
Fergus Wilson, along with his wife Judith acquired approximately 900 homes, mainly in Kent, but they are now in the process of selling their £250m property portfolio.
Tax changes and more stringent mortgage lending conditions, with larger deposits and higher rental income requirements, is impacting the market for future buyers, Fergus says, with fewer private investors entering the market, thereby restricting the number of homes available on the private rented sector.
“It will be impossible to achieve in the future what Judith and I achieved. The constraints put on [buy to let] by the government will ensure that. It is keen to ensure there is never a repeat of 2008… it is being cautious, some will argue over-cautious,” he says.
“The days of the small buy to let landlord are numbered. Very many landlords are exiting because of restrictive tax conditions due to hit them,” he adds.
Adding to this, recent research from Kent Reliance shows a rapid rise in the number of landlords creating limited companies in a bid to avoid higher taxes on their rental incomes when new rules on mortgage interest come in in April.
Beavis Morgan – Specialist property advisers
At Beavis Morgan, we have extensive experience in advising individuals and businesses on all aspects of the property market. We act for a broad range of property investors and developers who actively need advice on how to best structure their property deals, both to ring-fence and protect their property assets, as well as to minimise the tax arising from their business operations.
Further reading: Landlords make their move to avoid tax increase and maintain profit