The end of the buy-to-let dream? Purchases tipped to collapse by 27% in five years as tax grab deters landlords
- Tougher mortgage rules and tax crackdown means buy-to-let forecast to decline
- Small investors who need to buy with a mortgage to be hardest hit
- Landlords can still make a profit but must make sure their investment stacks up
The great British buy-to-let dream is under severe threat, a report has claimed, with a forecast that landlord purchases will dive 27 per cent by 2022.
Estate agent Savills believes the number of mortgaged buy-to-let property purchases will fall from 75,000 this year to just 55,000 in five years’ time, as small investors are squeezed out by tougher regulations and a tax grab.
The firm said it is already seeing the first signs of landlords selling up and exiting the market, a trend that is likely to continue as tighter mortgage regulations, increased stamp duty charges and the phasing out of mortgage interest relief combine to deter property investors.
Lucian Cook, director of Savills residential research, said: ‘Mortgaged buy-to-let investor numbers are forecast to fall most dramatically – we have seen the earliest signs that some mortgaged buy-to-let investors may be selling stock.
‘Those entering the market will be looking very carefully at yields, putting the spotlight on urban markets outside the capital.’
Savills’ research focussed on mortgage buy-to-let landlords, not the market for those buying outright with cash where investment is expected to remain more robust.
Its report highlights how the buy-to-let dream that became commonplace in the UK over the past two decades will be hit hard, as it becomes much tougher for ordinary investors to use a mortgage to get into property investment.
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