According to a recent survey by the Royal Institution of Chartered Surveyors, there will be a 1.8 million shortfall in rental properties by 2025 due to the stamp duty increases on second homes.
This stamp duty hike and the ban on letting agents' fees for tenants have contributed to a difficult year for landlords.
Continuing the trend, in April 2017 changes to mortgage interest relief for landlords will be phased in and by 2021, landlords will not be able to deduct mortgage interest payments or other business costs from their taxable income, which could force over 400,000 landlords up a tax bracket.
The tax changes will also impact supply, with Landbay's Chief Executive John Goodall saying: "By dampening buy to let purchase activity more than intended, the government’s actions look set to constrain supply of rental housing while demand continues to grow strongly. Tenants will unfortunately have no choice but to compete for the limited stock."
In a recent report, letting agent Jackson-Stops & Staff has predicted that rents in London will rise by a "marginal" 3 per cent as financial services tenants face uncertainty.
Nick Leeming, the agent's chairman, says: "The longer term five year outlook for rents in London is stronger than the sales market, as some people who would otherwise have bought will continue to rent due to uncertain market conditions. Some savvy investors will see 2017 as a good time to invest, with the pound’s depreciation in value making London property ripe for the picking."
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.
Whether you are looking to save on income tax, capital gains tax, inheritance tax, or all three, there are various options available to you, such as an investment in a portfolio of EIS and SEIS shares which is well worth considering, as long as you are fully aware of the risks.
We work across a broad range of sectors, advising entrepreneurial people with property ambitions and an appetite for financial growth.
For further information about how we assist, contact Steve Govey or your usual Beavis Morgan Partner.