Capital Gains Tax change is major worry for landlords...

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10 January 2023

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Capital Gains Tax change is major worry for landlords

A survey of some 2,000 landlords shows that more than four in 10 want recent changes to Capital Gains Tax allowances reversed.

The survey, commissioned by Octane Capital, found that confidence in the sector remains robust, despite the government’s best efforts to reduce the financial returns available to buy to let investors.

In fact, just eight per cent of those surveyed stated that they had reduced the size of their BTL portfolio over the last year.

However, the sentiment survey shows that legislative changes remain the biggest concern for the year ahead, followed by the increasing running costs of BTL such as maintenance and energy bills.

The day to day management also ranked as one of the biggest challenges facing the nation’s landlords, as did the increased cost of borrowing as a result of increasing mortgage rates.

The majority of those surveyed - 60 per cent - are also concerned about still more rises in interest rates.

As a result, just 16 per cent of those surveyed stated that they intend to increase the size of their BTL portfolio over the coming year.

When asked which government legislative change they would most like to see reversed, the recent changes to CGT allowance ranked top. The government plans to reduce the CGT tax-free allowance from £12,300 to £6,000 in April of this year, implementing a further reduction to just £3,000 by 2024.

The ban on Section 21 evictions and required improvements to EPC ratings also ranked as some of the changes landlords would most like to see reversed.

Octane chief executive Jonathan Samuels says: “It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated with just a small proportion opting to reduce the size of their portfolio in 2022.

“That said, while we’ve seen a degree of stability return following a shambolic mini budget last September, many buy to let investors remain cautious about the year ahead.

“This caution is likely to prevent them from investing further until a greater degree of certainty returns, although we must also tip our hats to the government in this respect, as their consistent attack on the sector remains the number one concern.”

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