Most property investors 'undeterred from buy-to-let'

The survey captured the mood in the market amongst Shawbrook clients and outlined their top challenges and expectations for 2016.

With changes in tax approaching, Shawbrook can reveal that almost two fifths (40%) plan to set up a limited company for their properties to counter the impact of tax changes, whilst just over a third (33%) plan to raise rents.

While the outlook for investors remains positive, new changes to tax relief and stamp duty have caused some investors to check their ambitions. Of the 44% who are not planning on purchasing a new BTL property this year, just over a third (37%) said it was due to the 20% cap on tax relief for BTL properties making the proposition unattractive, whilst almost a fifth (16%) said the 3% extra stamp duty levy on second homes and BTLs was putting them off.

The latest figures also revealed that almost half (49%) of clients said they considered regulation to be the biggest challenge facing property investors over the next 6 months, a significant increase on last year’s Barometer results, which found that regulation was something only 23%** of investors considered to be the biggest challenge they faced.

Despite these challenges over two thirds (61%) have a positive outlook for the upcoming 12 months, predicting either a large or small increase in property value. In total 43% of landlords saw an increase in tenant demand in 2015 and nearly two thirds (61%) saw an increase in their rental income. A further 44% are confident that their business will grow in 2016.

Karen Bennett, Sales & Marketing Director Commercial Mortgages comments:

“As a lender it is always great to see such positivity in the market, and as with our Broker Barometer conducted in late 2015, it seems that there is a lot of optimism amongst property professionals also. Obviously the new changes will have an effect and may instil more caution across the market; however, Shawbrook is well-placed to adapt to change, and we are expecting the market to remain buoyant.”