As the new restrictions on landlords’ mortgage interest tax relief come into effect this week, ARLA Propertymark has restated its objections to the increasing fiscal burden falling on the buy to let sector.
“It’s been a year since the government inflated stamp duty costs for landlords by three per cent and it’s already made the Treasury £1.3 billion. That’s more than changes to mortgage interest relief, which are now in force, are expected to make in their first three years. This will only further squeeze the sector and make buy-to-let a less attractive investment for landlords” insists David Cox, ARLA Propertymark’s chief executive.
“Our monthly Private Rented Sector report shows that since the stamp duty reforms came into effect last April, letting agents have seen the supply of rental stock decrease. In February, 44 per cent saw supply fall as a direct result, while only nine per cent saw it increase” he says.
“The impending letting agent fee ban will also make buy to let investment less attractive, as costs are passed on through inflated agents’ fees which landlords pay” he continues, saying that 27 per cent of current landlords are expected to stop increasing their portfolios as a result and a fifth plan to sell some of their properties.
“We’re facing a severe housing shortage at the moment, and if the supply of rental stock falls any lower relative to demand for housing, we’ll find ourselves in the midst of a real crisis” Cox concludes.