There’s still life in the buy to let market despite the regulatory and financial changes in recent years according to a leading property management firm. 

Apropos by DJ Alexander believes that while some landlords have exited the market, there are many who remain committed.

The latest figures show that the number of new BTL loans achieved its second highest figure for the year in October at 6,600 while the value of these loans equalled the highest for the year at £1 billion. 

BTL remortgaging was at the second highest level for the year in October 2019 at 6,600 and matched the highest monthly value of the year at £2.7 billion.

The number of BTL mortgages in arrears has fallen by five per cent in the third quarter compared to the same quarter in 2018 and the total number accounts for just 0.23 per cent of all BTL mortgages outstanding.

David Alexander, joint managing director of Apropos, says: “Many landlords will spend some of their Christmas holidays considering their future in the sector. Next year will see the culmination of a series of changes to taxation initiated by George Osborne which have sought to reduce the financial benefits of being a landlord and consequently pay more tax to the Treasury.

“The limiting of landlords Mortgage Interest Tax Relief phased in over four years from 2017/18 means that many landlords are facing considerably higher tax bills in the future as relief on interest is removed. Equally the loss of relief on wear and tear is a further cost to landlords.”

And he continues: “From April 2020, for landlords who once owned and lived in their properties but rather than sell decided to rent the availability of capital gains tax lettings relief has all but been removed and will now only apply where owners share occupancy with the tenant. This could have potential tax effect of increasing the CGT liability by up to £11,200 where a higher rate landlord qualified for the maximum available amount of letting relief.

“It is clear that many landlords have found the last few years a challenge. Many have already thought enough is enough and have sold up and exited the market. But there is still money to be made in the private rented sector and being a landlord can provide a reasonable income and a healthy pension.

“Being a landlord has never been more difficult but like all businesses the best people will understand the need for flexibility and be ready to change to meet the circumstances. It is inevitable that there will be change and you must make your business model to match the market.”