More like 40% than 1 in 5 according to AXAMake Text Bigger
Independent research carried out by AXA reveals over 40% of Landlords asked think they will be worse of after Section 24 mortgage interest relief reductions.
This compares to the standard government and treasury policy script quoting only 1 in 5 landlords will be affected by the tax changes made in the Summer Budget 2015 and now coming into force.
Almost half of private landlords have told AXA they are now looking to withdraw from the residential lettings sector by 2020.
- 21% plan to sell all their rental properties
- 10% are looking to reduce the number of properties in their portfolio
- 7% want to switch to ‘safer’ commercial property ownership
- 8% will transfer ownership of rental property to their spouse or another family member who is in a lower tax bracket to try and stay under the section 24 penalty of being a high rate tax payer.
Two in three landlords also report feeling scapegoated for the housing crisis and stigmatised by government, politicians and sections of the public for providing homes to rent.
One landlord said,”It’s a myth that we are rich. After mortgage, tax and repairs, I don’t make a profit on the two properties I own. People think landlords are fat cats who sit back and do nothing for their tenants.”
Head of Marketing for AXA Insurance, Gordon Rutherford said; “Landlords have been subject to one piece of new legislation after another in recent years, much of it very complex indeed. We see a real confusion as to what the new tax changes will mean, with government and landlords giving very different estimates of the impact.
“We need to remember that few landlords are professional property tycoons. Two thirds in the UK are ‘accidental’ landlords. They tend to own just one rental property that they’ve inherited or are finding hard to sell, and they make a modest income once time and expenses are out. They do feel increasingly apprehensive, as we can see from the numbers thinking of withdrawing their properties from the rental market in the coming years.”
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