There’s no doubt that due to the government’s enthusiasm to tax and regulate the Private Rental sector, Landlords are having a tough time of it. However, many are adapting to take advantage of the potential that still exists.


Due to the issues faced, it’s probably no surprise that some landlords have sold up or have reduced their holding, and others are deterred from entering this sector.

In October 2018, Rightmove reflected this by stating that there were 8.7% fewer properties available to rent in Q3 2018, compared to the same period a year earlier. A possible impact of this decreasing supply, is that the average asking rents outside London have now hit more than £800 per month for the first time.

Rent increases might be sustainable in some areas, as the demand may be there when you consider that the cheapest local homes are out of reach for at least 40% of 25-34 year-olds, even if they’ve saved a 10% deposit! Yet back in 1996, over 90% of the same age group could have purchased a home.* For many, renting is the only way forward at this stage.

And plenty are renting. One-fifth of all households are now in the private rented sector, of which almost 40% include at least one child.** Which means the days of the rental market being largely one for young, single people with few commitments are over.

(Sources: *Institute for Fiscal Studies, Oct. 2018; **Residential Landlords Association, Oct. 2018)


Limited Company status

Placing properties within a limited company means that they shouldn’t be affected by the tax relief changes, and lenders may apply a less stringent rental calculation as a result.

This is a route a number of landlords have opted for, but it won’t be right for everyone, particularly those with just one or two properties. Also, interest rates may be higher, and there might be implications for both capital gains tax and stamp duty. This is why it’s vital that you obtain tax advice from your accountant.


The Mortgage Deals on Offer

Lenders still want to lend to this market, and would be affected by any lower take-up from landlords. As a result, the subsequent fight for market share has delivered some decent rates in this sector.

It would make sense to have a chat if you’d like to discuss the current deals, or seek advice on a way forward through the plethora of red tape that now exists.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the costs of the mortgage.

The value of your Buy-to-Let property and income from it can go down as well as up. You may also require advice on the legal and tax issues.

The Financial Conduct Authority does not regulate legal and taxation advice, and most Buy-to-Let mortgages.

HM Revenue & Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Your property may be repossessed if you do not keep up repayments on your mortgage.