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Nearly half of buy-to-let landlords are “waiting and seeing”

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A new report by Shawbrook Bank looked at how landlords are reacting to regulatory changes and the Brexit negotiations. They found that 49% of landlords have adopted a “wait and see” approach by delaying for six to twelve months before considering changing their business tactics to deal with changes.

The report found that 22% of landlords see regulation changes as a threat and 16% are concerned about possible interest rate rises. Around 16% of landlords are worried about lending restrictions for portfolio landlords.

The change that has most affected landlords is the reduction of tax relief on commercial mortgage repayments. Over half (52%) of landlords said that this has had the biggest impact on their business.

Landlords are looking for ways to counteract changes that have affected them financially. Shawbrook found that 33% of landlords have or are planning, to set up limited companies to save tax, and 18% are remortgaging. Nearly a fifth (19%) are intending to sell property.

Brexit could affect the buy-to-let market, but landlords are more concerned about regulatory changes than possible Brexit changes.

Despite the obstacles facing landlords, Shawbrook is positive about the long-term future for buy-to-let landlords.

As of 2017, buy-to-let mortgages were 12.8% of the total mortgage lending, down from 17.7% in 2015. This weaker demand for buy-to-let mortgages has resulted in lenders offering incentives, such as reduced valuation fees to attract landlords. Fierce competition between lenders has kept interest rates low as well.