Landlords turn to upgrading over buying new rental properties
The issues surrounding the taxation of rental properties has meant that landlords in the UK are now changing their strategies when it comes to their rental portfolios.
While in the past few years, landlords have been spending big on adding rental homes to their portfolios as demand rose and the potential for strong returns went up with it, they are now looking at ensuring the stock they have is the very best quality possible.
Landlords know that they can get a great price for rental homes that are offering tenants somewhere to live that is of a high quality and has all of the modern desires such as updated interior decor and a good broadband connection.
According to the Private Rented Sector Trends report from Paragon Mortgages, only nine per cent of landlords across the UK are now intending to buy a property in the next six months, which represents a drop from 14 per cent at the time of the last report in the last quarter of 2015.
Paragon said that this drop in investment intentions has come from the fact that landlords are now more aware of how the changes in taxation will affect them moving forward. In the latest survey, some 76 per cent said they now know how they will be affected by the changes that are coming into play. This was a significant increase from the 62 per cent who said the same three months ago.
"The PRS is facing the prospect of a great deal of change as a result of the significant shift we have seen in fiscal and regulatory policy," said John Heron, director of mortgages at Paragon.
"Some landlords are responding to this uncertainty by planning fewer new purchases and investing in their existing portfolios. At the same time credit profiles are very robust and improving, a picture that is somewhat at odds with the picture being painted in some quarters," he explained.