Editor's note: This brief was summarised by The Property AI Team from a report by The Negotiator. Read the original article for full details.
Buy-to-Let Investors Suffer 32% Jump in Losses, HMRC Data Shows
Buy-to-let investors have seen losses on their property sales jump 32% in the past year to top £1billion. HMRC data on Capital Gains Tax returns shows losses rose to £1.15billion from £870million in the previous 12 months, according to research by Bowmore Wealth Group.
Stagnating Prices and Falling Values in Key Markets
David Floyd, Head of Private Clients at Bowmore Financial Planning, says buy-to-let investors have been hit by stagnating property prices nationwide, and by falling prices in some key markets such as London.
Floyd says buy-to-let investors are looking at the growth in global stock markets and the high yields on UK Government bonds, and asking themselves if they should still be in an investment that has a relatively low net yield.
Renters' Rights Act May Have Prompted Sales
The Renters' Rights Act may have also prompted buy-to-let investors to sell up even if it means taking a loss, according to Floyd.
He says a lot of buy-to-let investors found that the administrative burden of being a landlord, as opposed to being a stock market investor, was surprisingly high.
Floyd explains that this administrative burden and the costs of maintaining the stock left buy-to-let investors with net yields that were fairly low and were flattered by house price inflation. However, house prices have now stalled and the prices of many flats has fallen sharply, he says.
He adds that the new Renters' Rights Act added an extra level of jeopardy and risk into being a landlord.
Source: The Negotiator