Half of landlords shun rental market amid rule changes

Half of landlords shun rental market amid rule changes

Half of landlords are considering leaving the rental sector due to ever increasing rules and regulations.

In research collated by Aldermore Bank, two thirds of landlords felt regulatory changes had been too broad and needed to focus more on "punishing rogue landlords".

Almost half, 48 per cent, of the 1,000 landlords surveyed by Aldermore told it they were considering leaving the private rented sector as a result.

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This comes after landlords were warning of a crisis in the private rental market as recent figures showed a sharp drop in new rental properties becoming available.

A quarter of landlords quizzed by Aldermore cited regulatory changes as the biggest threat to their investment, while others pointed to tax changes and high maintenance costs. 

Almost half, 49 per cent, of landlords said the increase of stamp duty had prevented them from expanding their portfolios. 

The introduction of an additional 3 per cent stamp duty surcharge in April 2016 was closely followed by the abolition of mortgage interest tax relief for landlords, to be phased down to a 20 per cent flat rate in 2020, further pushing the limits of landlord profitability.

Damian Thompson, group managing director of retail finance at Aldermore, warned private landlords exiting the UK market would mean less choice for renters and would likely impact negatively on the quality of rental properties in the country.

"The number of people renting in the UK has been rapidly growing, up 1.7 million in ten years, so it is vital there is enough rental supply to meet this demand.

"Landlords may have been impacted by increased costs and more complex processes in the past five years but the rental market continues to be a strong long-term investment.

"Landlords will need support and advice on how to manage their portfolios going forward from lenders and the wider industry so they can continue to support the private rented sector the way it needs to be." 

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