Over 100,000 landlords have incorporated this year - claim

Landlord confidence has returned despite government tax changes to the private rental sector - although research for the survey that produced these findings came before the announcement that letting agents’ fees on tenants were to be banned.

Kent Reliance’s latest Buy to Let Britain report claims landlords’ confidence is at its highest in a year, with 54 per cent of buy to let participants confident over the prospects for their portfolios, according to a survey of 900 investors run with BDRC Continental. 

This is a marked recovery from the second quarter of the year, when confidence hit a record low - 39 per cent - as a direct result of higher stamp duty charges. 

Kent Reliance says many property investors have taken action to mitigate the additional tax costs they will face when tax relief is lowered on mortgage interest payments for individuals, starting next April. 

The firm says there have already been more than 100,000 limited company loans issued in the first nine months of the year, double the total amount in the whole of 2015 - the rate in the third quarter of the year was over 12,000 a month. 

In the survey, 11 per cent of landlords say they have already incorporated or have moved holdings to a lower-rate-tax-paying spouse or partner to limit their tax exposure; a further 25 per cent are considering doing so. 

Kent Reliance estimates limited company lending in 2016 could total 143,000 for the year as a whole, rising to 163,000 in 2017.   

The firm also claims rent rises are likely to accelerate in 2017. 

It survey reveals a third of landlords were expected to increase rents in the next six months alone, by an average of 5.4 per cent. Kent Reliance forecasts that rents will rise by an average of 3.0 per cent in 2017. 

Kent Reliance’s research team analysed Office for National Statistics census, ONS population and English Housing Survey data, plus information from Citylets and LSL Property Services, as well as using material from the CML and ARLA. The survey was conducted in the third quarter of 2016.