Market Insight - May 2017
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Firing the Starting Pistol

Lettings
Company landlords reach record high

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One in five homes let are owned by a company landlord. The proportion of homes let by a company landlord reached 20% in Q1 2017, the highest proportion since records began in 2010 according to the Countrywide Lettings Index. The numbers have been steadily rising since 2013,
but Q1 2017 recorded the biggest annual jump (6%). Changes to tax relief on rental properties, announced by the former Chancellor in the 2015 Spring Budget may be behind the rise.

The changes, being tapered in over a four-year period beginning on 6th April 2017, reduce the tax relief landlords are able to claim to the basic tax rate of 20%. It’s the landlords with a highly-mortgaged property portfolio who will be most affected by these changes.

Companies are generally taxed more favourably which means that landlords can typically save more by holding their buy to let properties in a company rather than as an individual. Landlords letting homes in London are most likely to own their property using a company name. 27% of properties let in London are owned by a company, a larger proportion than anywhere else. Company landlord lets drive the top and bottom of the rental market with the most and least expensive homes likely to be owned by a company landlord. Over the last year, a quarter of homes let by a company landlord cost less than £500 PCM. Nearly one in ten homes (9%) let for between £1500 and £2000 PCM were owned by a company landlord, compared to 6% owned by non-company landlords.

 

 

 

 

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