UK landlords say long-term growth is more important than tax efficiency

UK landlords are bullish about the viability of the buy-to-let industry. This is despite recent legislative changes, according to new research from Property Partner.

Less than half of all landlords (43%) have changed their views on the buy-to-let market since April’s tax relief cut and last year’s stamp-duty hike came into effect.

Dan Gandesha, CEO of Property Partner, states: “This research underscores the confidence being shown in the buy-to-let sector across the UK.”

Why are UK landlords so confident about continued growth?

Most UK landlords perceive buy-to-let property as a secure, long-term investment. Their focus, therefore, tends to be on long-term growth rather than short-term tax efficiency.

This confidence was also evident in the research. Just 7% of UK landlords consider risk avoidance as a priority when making decisions on property investment. This is compared to 12% of other investors.

Their confidence isn’t without basis, either. Since 1972 (when records began), there has yet to be a five-year period where UK residential property has generated negative total returns.

Gandesha continued: “With no end in sight to the acute shortage in housing stock, there is an inevitability to the continuing upward pressure on prices. In the long term, prices are expected to rise faster than the rate of inflation, economic growth and wages, despite recent political uncertainty.”

The negative forecast put forward from many quarters appears to contrast with the current opinion of UK landlords. This suggests the outcome of recent legislation may not be quite as damaging as expected.

Call on 3 Wise Bears for more finance-related advice on the latest buy-to-let industry trends.