Are there now to many barriers to becoming a private landlord
Are there now to many barriers to becoming a private landlord. Is the accidental landlord a thing of the past? I regularly attend property network events up and down the country as part of our speaking programme helping landlords understand the process required to evict a tenant.
I am starting to see the same faces at these events and noticed that at some events there is a notable lack of fresh keen landlords. This is despite the fact that research shows that the number of buy to let properties has increased year on year for the last five years.
This is reflected by a couple of financial institutes that we sometimes work with. They have both reported a downturn in the number of new buy to let landlords applying for funds.
It is not difficult to see why the number of new landlords are declining. With all the recent and potential additional changes, it must be quite hard to justify the time and effort of owning just one buy to let property, especially in the short term.
Most new landlords borrow the finances to purchase their buy to let property, is the change in stamp duty and the phasing out of mortgage tax relief preventing them from seeing the long term benefit of becoming a landlord?
A possible alternative is that new landlords are not starting with one property but buying a portfolio to justify the time and effort?
Despite all the changes including the Housing act and energy efficiency, the statistics show that it is still financially beneficial to become a landlord. So why are we seeing year on year less and less new private landlords?
I would suggest that the ongoing increasing in regulations within the property sector accompanied by recent changes to income tax relief on mortgage interest payments seem to be favouring more experienced, professional landlords. When you then factor in should something go wrong and the current issues when it comes to removing a tenant, it is clear to see why what once was almost a no brainer is now something any budding landlord needs to consider.