Law firm reports rise in number of landlords wishing to get out after clobbering by Government

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One of the UK’s largest law firms is reporting an increase in the number of private landlords wishing to reduce or sell off their property portfolios.

Irwin Mitchell says that this is a direct result of multiple changes forced on landlords by the Government, which have made buy-to-lets a less profitable investment option.

The firm warns, however, that disposing of buy-to-let portfolios will not be straightforward, with landlords being clobbered with Capital Gains Tax bills.

The law firm says that landlords have been affected not just by legal changes, but by growing public anti-sentiment being increasingly expressed in the media against the backdrop of the housing crisis.

In recent months, landlords have seen more stringent mortgage lending, particularly for those with four or more properties; the introduction of the 3% Stamp Duty surcharge on the purchase of buy-to-let properties; the phasing out of the ability to claim mortgage interest against tax; and the spectre of a Labour party pledge to introduce rent controls.

Jeremy Raj, partner at Irwin Mitchell, said: “It’s understandable that landlords who have been hit with some difficult changes to swallow, are now thinking of exiting the buy-to-let market in order to invest elsewhere.

“We’ve certainly seen an increase in enquiries from landlords worried about the future market.

“However, the CGT liability that will crystallise on each property sale must be factored in when weighing up whether it is best for landlords to divest of their property portfolio.”

He added: “If the Government really wants to help young people on to the property ladder, it needs to combine the recent disincentives in the buy-to-let sphere with fulfilling its promises to get more housing built.”

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Written by: Houseladder