Buy-to-let landlord interest slumps after new UK tax

Investor interest in British rental property declined by more than a quarter last month compared with a year ago, dampened by new tax changes aimed at cooling the booming buy-to-let market, according to data results released yesterday.

Online property listings company Rightmove said the number of investors planning to purchase a property for rent dropped by 27%, following a surge between December and February as buyers rushed to avoid the new tax.

As of April 1, buy-to-let investors and second homeowners must pay an additional 3% stamp duty on new purchases compared with first-time buyers.

“This waning of interest definitely seems to predict a slowdown in the buy-to-let market, but what’s not yet clear is if this will only turn out to be a short-term pause,” Sam Mitchell, Rightmove’s head of lettings, said.

Britain’s government has been keen to boost individual home ownership and is raising taxes on the rental sector, while the Bank of England last month said it would tighten credit checks on landlords.

“It could be that some investors are waiting until the tax changes have some time to bed in before they review their business and continue to make purchases,” said Mr Mitchell. The Rightmove survey is based on data from properties advertised on its website rather than a survey of opinions.

* Reuters