Buy-to-let is becoming one of the most popular forms of property investment but there is still a lack of support for those in the sector. A survey commissioned by specialist buy-to-let lender Paragon Mortgages revealed that landlords are eager for more help and advice to cope with changes in legislation and tax. In the first quarter of 2013, 78 per cent of those surveyed said they have a significant requirement for advice. This percentage increased to 89 per cent among those owning more than 11 properties.
Just under half of landlords surveyed (46 per cent) admitted that they find it difficult to keep up with changes in legislation, while 43 per cent are worried about the impact Universal Credit will have on the private rented sector. In fact, 90 per cent believe taxes and regulations, combined with requirements to check the immigration status of tenants, will make being a landlord difficult over the coming months.
It isn't just new landlords that are concerned about what the future will bring either. John Heron, director of mortgages at Paragon Mortgages, explained that many of the landlords surveyed were "greatly experienced" but still felt the need for help and advice. "Of course the buy to let landscape never stays the same, and new regulations affect professional landlords just as much as they do those who are relative newcomers to the market," he said.
The biggest worry for landlords is additional licensing, with 54 per cent claiming this will hit them hardest. Fifty-three per cent believe Capital Gains Tax will have the biggest impact, while 49 per cent are concerned about council tax. To understand these changes, Paragon Mortgages advises doing research into landlord obligations before buying a property and joining a membership organisation. These can give landlords access to the advice and expertise needed to run a successful rental portfolio. Among the organisations available to the buy-to-let sector are the National Landlords Association, the Residential Landlords Association and the Association of Residential Lettings Agents.
With more and more people set to enter the buy-to-let sector, access to advice and support through these bodies will prove vital. According to figures from the Council of Mortgage Lenders, the sector has seen more activity lately, with gross mortgage lending totaling GBP 4.2 billion across 33,500 mortgages in Q1. To ensure buy-to-let continues to thrive, mechanisms must be in place to ensure actors are operating in accordance with regulations.
- Wednesday 29 May 2013