The number of buy to let investors in the UK has hit a record high of 2.5m in the latest tax year - that’s five per cent up on the previous 12 months according to London agent ludlowthompson.
The number of landlords has increased 27 per cent in the past five years, up from 1.97m in 2011-12, and landlords now own an average of 1.8 buy to let properties each – rising for the fifth consecutive year.
The agency says that the fundamental aspects that make the UK and London market attractive to investors remain strong, including demand continuing to outstrip supply with government statistics predicting that the population of London alone will increase to approximately 10m by 2035.
“The long-term picture for the buy to let market remains strong. As a ‘London-leaning’ Brexit looks more likely, a final deal will focus on strengthening the appeal of the capital as a go-to destination for overseas professionals, graduates and students alike” anticipates Stephen Ludlow, the agency’s chairman.
He says recent Bank of England data also shows the resilience of the sector, despite the introduction of the three per cent stamp duty surcharge on additional homes, plus new mortgage stress tests and the tapering of mortgage interest relief.
Some 12.7 per cent of all mortgages in Q4 2017 went to buy to let investors, only a slight dip from 14.4 per cent in Q4 2016 and 16.3 per cent in 2015.
Ludlow continues: “Even taking into account the implementation of changes to buy to let tax relief, there are a number of tax reliefs available to landlords. Investors should also note that, historically, growing earning power and rising wages have tended to lead to rising rental values.”
Previous research from ludlowthompson shows that even when the new buy to let tax changes are fully implemented, investors are still set to benefit from £16.7 billion in tax relief.
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Being able to claim your expenses against your income isn’t ‘tax relief’ it’s just normal business practice, being taxed on an expense is an unfair penalty that is harming the PRS
It is a tax relief - it is a tax relief that most businesses are entitled to. However, this tax relief has been restricted for landlords to the basic rate of tax on their investments. After all, BTL is classified primarily as an investment, not a business, so BTL is lucky to get any relief at all.
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