The chances of a no-deal Brexit are looking increasingly likely after EU leaders snubbed Theresa May’s latest compromise offer, but that will not stop a significant number of landlords from expanding their portfolios over the next 12 months, according to new research.
Some experts have warned of chaos if the UK crashes out of the EU without an agreement, and yet two-thirds of landlords surveyed said that they plan to increase their portfolios over the next 12 months, a new survey has revealed.
The Property Hub, which carried out the research, found that 77% of landlords will look to buy at least one more property in 2019, with 70% saying that even a no-deal Brexit would be unlikely to affect their growth plans.
Various reports suggest that buy-to-let landlords are being driven out of the market by the government’s tax crackdown as growing numbers struggle to make their sums add up. However, 84% of landlords polled said they had no plans to sell any properties in the next three years and 66% said even if the government were to announce further tax measures, they still would not be offloading properties.
Rob Dix, co-founder of The Property Hub, said: “There’s been so much talk of a mass exodus of landlords and the death of buy to let, it’s easy for some would-be landlords or, indeed, tenants, to believe the rental market is on its knees. However, it’s clear from our survey that landlords are far from retreating from the market.”
The survey also asked landlords about proposals that could have a significant impact on the industry, including the possibility of three-year tenancies becoming mandatory.
Four in five landlords - 82% - polled said that they would be in favour of three-year tenancies becoming mandatory if they were offered a way to remove tenants who fall into rent arrears that is faster than the existing fault-based method, while 69% said the ability to increase rent would need to be given, and 59% said there’d need to be tax incentives, like the ability to deduct more mortgage interest.
Less than 9% said they would oppose the policy regardless.
Dix continued: “Getting good long-term tenants is the goal for any landlord so it’s not surprising that less than 9% of landlords would be against this policy regardless of any concessions.
“However, landlords obviously need to be protected too so it’s only natural that those operating in the sector are calling for some reassurance.”
Asked what they would need to see happen in order to support compulsory landlord licensing, 37% said that they would want the removal of any additional local schemes, except those applying to HMOs, while 43% said an annual fee that doesn’t exceed £100 per property.
Some 65% want a plan to ensure that it would discourage rogue landlords – such as proof that non-registration could be detected and enforced and 55% said a tax incentive or removal of an existing anti-landlord tax measure.
Again, less than 9% said they’d be against landlord licensing completely.
Dix added: “It’s telling that the most popular wish for licensing – more popular even than a tax break – is some reassurance that it will actually work. The majority landlords take pride in providing a good service, and are as keen as anyone for the rogues who give the industry a bad name to be pushed out.
“Taken as a whole, the results of our survey show that the caricature of landlords fleeing the sector when the going gets tough isn’t in line with reality. Most landlords are in it for the long term and have sound business plans – they don’t view property as a get-rich-quick scheme.
“The Armageddon-style headlines in much of the press over the last two years in no way reflect the way landlords are feeling. Buy to let is far from dead. Are investors operating in a new landscape? Certainly. Is it one they’re unable to navigate successfully? Absolutely not.”