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Brokers view tax reform as more important to bridging market growth than Brexit Over half of brokers (52%) believe that reform to tax legislation for property investors would boost the bridging market. This is twice as many as those view who the outcome of Brexit negotiations (27%) as the most important factor in driving growth in the market, according to a survey of 200 brokers by InterBay Commercial, part of specialist lending group OneSavings Bank. Despite the current focus on Brexit from policymakers as the negotiations reach crunch point, InterBay’s research indicates the need for the government to consider taxation changes to support the domestic property market in its upcoming Budget. Reversing recent tax reform that has hit landlords and the wider buy-tolet market was the top priority for brokers. One in five (19%) felt that the removal of the additional 3% stamp duty land tax for landlords would help to drive growth in the market, whilst, surprisingly, only 16% called for the reversal of the recent changes to the tax treatment of mortgage interest for landlords. Other changes to tax legislation highlighted by brokers included the reduction or removal of capital gains tax, a government subsidy for small scale developers, and a financial subsidy for housebuilding across all tenures. In addition, some brokers believed that greater regulation
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in the sector would help to boost growth in the bridging market. In comparison, the survey revealed that just 27% of brokers saw Brexit as the biggest potential support for market growth; 15% of brokers thought that no Brexit at all would be the most beneficial element, one in ten thought a ‘soft Brexit’ would positively impact the sector, while just 3% saw a ‘hard Brexit’ as positive.
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Darrell Walker, Head of Sales, InterBay Commercial said, “The swathe of tax changes in recent times have left an indelible mark on the bridging and wider buy-to-let market. Some landlords have been forced to recoup higher tax costs through higher rents, others no longer have the funds to refurbish properties, and many amateurs have left the market altogether. “At a time when the supply of affordable property across all tenures remains a key economic challenge across the country, taking steps to encourage, rather than deter investment into the sector would go some way to alleviating our current housing crisis. Taking a second look at the tax burden investors must shoulder is a good place to start. Whilst Brexit is understandably top of the Government’s to do list as the Chancellor prepares for the Budget, supporting the property market cannot and must not be forgotten.”
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Reversing recent tax reform that has hit landlords and the wider buy-to-let market was the top priority for brokers
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