WANING BUY TO LET INVESTORS WILL HIT TENANTS, SAYS PAPPA CHAIRMAN
PAPPA Chairman Ben Dreher fears that a significant fall in investors looking to purchase Buy To Let properties in Plymouth could leave tenants struggling to find somewhere to live.
Ben says there has been a 75 per cent drop in Buy To Let investors at Mansbridge Balment Plymouth, where he is a Director, as the Government’s sweeping changes to that sector of the market really begin to bite.
Many of the valuations he and his staff are attending are Buy To Let owners looking to cut their losses and off load their stock, but he says this will impact on those who want or need to rent.
“The twin effect of the three per cent Stamp Duty surcharge on second home owners and the limits on mortgage interest tax relief for landlords has seen the Buy To Let market substantially regress in recent months,” said Ben.
“It is just not as financially attractive as it once was, but with so many Buy To Let investors looking to sell these properties, it does make you wonder where those people looking for rental properties are going to find them.
“It clearly will get harder if this trend continues, and could force up rental costs if there is a high demand in the face of a supply shortage.”
The slump in the Buy to Let market is a potential double whammy for tenants.
PAPPA members have already voiced their concern at the Government’s proposed Tenant Fees Bill, legislation which they and other industry experts fear will have a damaging impact on tenants – not protect them as intended.
The association has put its weight behind a campaign by industry body ARLA Propertymark, which is urging Ministers to rethink the Bill.
Under the proposals, landlords and letting agents will be prohibited from demanding certain payments from tenants, while both holding and tenancy deposits will be capped.
But ARLA Propertymark say that the proposed ban would probably result in landlords passing any extra costs on to tenants and will also make Buy To Let investment even less attractive, compounding those problems already facing the sector.