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What regulation and tax changes really mean for landlords and brokers
The buy to let market faces significant shifts as landlords prepare for the Renters’ Rights Bill (RRB) and potential tax reforms. The Pegasus Insight Landlord Trends report for Q4 2024 highlights growing concerns, with many landlords considering how best to adjust.
While 62% of landlords claim to have a good awareness of the Renters’ Rights Bill, a third are still not fully informed. Unsurprisingly, larger portfolio landlords are generally more aware of the bill, while smaller landlords, particularly those with single properties, are the least prepared.
Concerns over the bill’s impact are widespread. Around three-quarters of landlords believe it will negatively affect their own lettings business, and 65% anticipate significant disruption to the broader PRS. With Section 21 set to be abolished, landlords are particularly concerned about longer arrears periods before mandatory possession can be sought.
Another pressing issue is the lack of a phased introduction, with 80% of landlords worried about how quickly they will have to adapt.
Additional insights from an NRLA survey suggest a significant uplift in the proportion of landlords who have ‘little’ or ‘no’ confidence in their ability to continue letting property (from 37% to 58%) if there is no court reform alongside the removal of Section 21.
Tax uncertainty adding to challenge
Tax changes are another growing concern. The NRLA insights further outline that 85% of landlords are worried about potential Capital Gains Tax (CGT) reforms, and 73% have some concern about the EPC ‘C’ requirement. Meanwhile, the proportion of landlords considering CGT an important influence on their portfolio decisions has doubled from 17% to 36% in the past year.
The opportunities
While some landlords are considering leaving the market due to these changes, on a more positive note, 43% believe that the shifts will help professionalise the sector, and 10% see an opportunity to acquire properties from those selling up.
With landlords constantly having to reassess their options and portfolios, the intermediary market can demonstrate its ever-increasing value by providing essential support in this area - particularly regarding refinancing options and structuring portfolios through limited company setups. Support which can help cement long-term relationships.
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