A prominent agent who advises many landlord clients says the Capital Gains Tax cuts announced in the Budget are too small to incentivise people to sell
Jo Eccles, who runs the London-focused buying and selling agency Eccord, says: “The Capital Gains Tax reduction announced in the Budget is unlikely to have a major impact on landlords’ decision making. The value of most landlords’ properties who bought within the past 10 years, since the peak of 2014, is actually less than what they paid.
“In a recent property tour for an apartment buyer, 80% of the properties we showed them were pied a terres or buy to let investments which owners wanted to dispose of.
“And in nearly all cases, the owners were prepared to accept the same price they had purchased it for – or less. Therefore, there are no capital gains on the property and Jeremy Hunt’s tax break will be unlikely to impact them.
“The bigger driver for landlords to sell remains higher mortgage interest rates and the inability to offset them against their rental income. Those who don’t have the cash resources to pay down their mortgages are seeking a sale ahead of a higher rate mortgage renewal, as the rental yield often isn’t high enough to cover the higher mortgage and other outgoings.”
In the Budget, Chancellor Hunt announced a drop in the higher rate of. got from 28 to 24 per cent.
Eccles says that far from reducing in size, London’s core rental market of flats is increasing. This is because of the relatively subdued sales market
“Low transaction volumes and underwhelming sales values are leading more sellers to explore the rental market as ‘unintended landlords’” she says.
“Landlords … are facing a disjointed market, with certain properties letting quickly and others gaining little traction. Rents are stable, but landlords are having to be responsive to price changes if needed, to reduce the risk of void periods.
“We continue to see a general consolidation of personal affairs across the property sector, with owners keen to sell properties which are surplus to requirements.
“The timely disposal of rental properties is a recurring conversation with our landlords as tenancies conclude and they take the opportunity to test the sales market.
“However, many haven’t achieved the capital growth they were hoping to achieve, as values remain largely below the 2014 peak, and so are returning to the rental market for the time being.”
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Yeah whatever I’m selling regardless. A reduction of 4% as well as allowances halved. They give with one hand and take with another. Jeremy Hunt fools no one.
Message to tenants. Better start saving that deposit and learn some diy skills whilst you at it
I agree reduction in C/gains won’t encourage Landlords to sell but The Renter’s Reform Bill will that’s the whole point of it,
Its designed to install the sitting Tenants of the ‘60’s / 70’s that’ll get you out.
It’s made zero difference to me, I was selling before, nothing has changed 🤷♂️💰🏝🏝
2 gone. 1 about to go, the rest throughout the year. There is no point anymore. Unfortunately will put my tenants in to higher rent elsewhere or back with family.
Taxing turnover is the killer with mortgage rates as they are is causing the rent rises and reduction in rental stock, why is the government so stupid.
What a question to ask 😂😂 If we knew that we could be millionaires 💰💰
I'm selling up regardless of what happens or changes. Better to take the hit with CGT now than end up in a situation where ALL control is taken from you.
That’s my view too. I’m also looking at Scotland and Wales too. No thanks!
Too many negatives, without even considering what Labour will implement under their Tenant’s Charter, Wales a nightmare, Scotland much the same. Although promising not to, what if Reeves increases the capital gains tax to a round 30%, under the guise of everyone paying their share.
anything could and likely will happen under labour and reeves
Landlords are being robbed !!! and the result is rents continue to increase !!!
The opinion expressed by this agent regarding the reduction in CGT from 28% to 24% not incentivising LLs to sell does not represent the views of all PRS LLs in the UK. The PRS market, valued at around £1.2 trillion, is indeed facing challenges that are eroding its value rapidly.
LLs have been under significant pressure from various factors such as increasing interest rates, shortfalls in Local Housing Allowance (LHA) rates, possession orders, regulations, legislations, added taxes, and a lack of support. The regulatory environment for LLs is perceived as burdensome, while BTL lenders remain largely unregulated. Tenants and even local housing authorities are also seen as lacking in regulation.
To sustain a fair and balanced environment moving forward, it may be beneficial if all parties involved in the housing equation, including LLs, lenders, tenants, and housing authorities, are collectively regulated to some extent. This would help create a more level playing field and address the challenges faced by LLs in the PRS market.
I wonder if Ben Beadle or anyone from his team reads these and other comments from other sites. It makes you wonder, who he is actually representing.
Of course he doesn't or he would end up sat in the corner of his office, sucking his thumb and whimpering.
From another website:
In a joint letter sent to Housing Secretary Michael Gove, the National Residential Landlords Association (NRLA) and the charity Crisis raised doubts over the future of the Renters (Reform) Bill, which was expected to scrap Section 21 evictions. The confusion and uncertainty about the future of the Bill is hurting the rental market and leading many responsible landlords to hold back investment in new homes to rent. The rumour, speculation and a litany of off-the record briefings are causing a huge amount of concern and uncertainty for tenants and responsible landlords."
So there you have it. If you don't agree with the RRB, Bungling Boy Beadle does not class you as a RESPONSIBLE landlord. I wonder how many landlords leaving the NRLA, he will be reponsible for?
The proposal of removing Section 21 with TRRB is certainly hurting PRS no surprise there it what it’s for but its introduction will obliterate it. It’s necessary to drive us out and clear the gangway for the Big Boys to take over and aren’t they rampant with full Government support no Licensing for them. No Stamp Duty Land tax to buy from them, Grants, low Deposits, lower interest rates.
For us Licensing Schemes to relieve us of our finances, Section 24, Section 21, more severe tax treatment it’s a stitch up plain & simple no need to go on.
There are a couple of good threads on Property 118 at the moment called “ WHY IS THE NRLA SUPPORTING ANTI LANDLORD NEEDS” discussing why Ben B and his crew are doing what they are and also “NRLA and Crisis team up to demand Renters (Reform) Bill update” both of which are worth reading. There was one post from Jesus Diaz I found particularly interesting which I hope he will not mind me reposting.
I commented I would like to see NRLA members going to AGM to deliver a vote of no confidence in Ben B and he replied.
“NRLA represents only 5% of the landlords and most of them do not attend their meeting as it is a £300 cost.
Now the more confusing and legislation in the rental market is excellent business for NRLA. They are not just a Landlord Association but their number of business has increased dramatically with the 70 laws, rules and regulations introduced in the last 8 years.
So NRLA owns OpenRent, A Deposit Scheme, Various expensive courses ranging from law to how to how to be compliant: Safe2Rent, Deposit, inventories, Licensing support, Mediation Services, Tenancy referencing, Full Tenancy creation, Rent Insurance, Photos and plans, Right to Rent. The last one is around £700+ annually for each studio or apartment. So NRLA interest in supporting the government in making things far more difficult and confusing for their members is excellent business while landlords will struggle to see if after all these service is there anything for their property renting or work.”
I think this rationale is spot on.
The NRLA does not represent the interests of its members. It is only concerned with building their business model.
We need a new Landlords Asssociation for Landlords only, no other interests.
Catherine, excellent post and I didn’t know there was a connection between Open Rent and NRLA that I have used occasionally in the past.
They have over 150 pieces of legislation governing us but that’s not enough torture they want a Redress Scheme for one of NRLA associates to make another fat soft living for himself, who’s going to Redress us ?.
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