Almost a quarter of landlords plan to sell up over the next 12 months as buy-to-let becomes increasingly difficult to navigate, a report has claimed.
Research from the National Residential Landlords Association (NRLA) found that 23% of property investors intend to dispose of an additional residential property this year.
Buy-to-let landlords said tougher tax rules, extra costs to make green upgrades, and tighter restrictions on evicting problem tenants were their motives.
Nick Clay, research officer at the NRLA, said:
“Those planning to sell cited changes in tax and regulation, as well as increased costs as the key reasons for selling property.
“The fear of not being able to take back possession of property was the single most important regulatory reason why landlords were selling.
“On tax, the changes in mortgage tax relief continue to bite.”
Unincorporated landlords can no longer deduct any of their mortgage expenses from their rental income to reduce their income tax bills. Instead, they receive a basic-rate tax credit which is worth 20% of their mortgage interest payments.
The old system offered higher-rate and additional-rate taxpayers more generous 40% or 45% tax relief on mortgage payments.
Landlords who wish to sell additional residential property outside of their main residence have 60 days to report and pay any capital gains tax.