Buy to let landlords are on the way out and Build To Rent will dominate the sector in the foreseeable future.
That’s the view of Scott Marshall, managing director of specialist finance house Roma Finance.
He says his firm is already seeing more and more landlords using limited companies to maximise tax efficiencies on their investments, while individual landlords also have to face the welter of tax and regulation changes introduced recently.
This includes new HMO regulations coming into force on October 1. “We expect that there will be some casualties in terms of compliance with the new HMO rules and there are likely to be a period of adjustment in the shared facilities housing sector, for example in London some landlords are moving into Airbnb letting instead” he says.
He also points to new EPC rules which came into force back in April will have an impact on individual landlords’ costs.
“Clearly a barrage of regulation and legislation is moulding a new breed of landlords. The days of the hobbyist landlord are numbered as the upkeep and management of rental properties becomes more onerous” says Marshall.
“Only the larger players will be able to cope, as they can benefit from their scale of operation. With the HMO rules coming into force in October, maybe more affordable housing is needed more than ever as an alternative” he says.
“As a lender we’re still experiencing a high level of finance demand for rental property, and in the wider market there are many product updates being introduced as lenders seek to adjust criteria to keep pace with a changing market. But it seems clear that the future will be driven by professional landlords rather than the armchair investors of the past.”