Landlords in the East Midlands continue to believe in the financial benefits of letting, despite fears that many would sell their properties in order to cash in on the recent tax changes, according to the RICS Residential Lettings Survey.
The survey, which asked surveyors in the region to estimate the percentage of landlords who are planning to sell at the expiry of tenant leases, found that only two per cent are intending to put their properties on the open market.
It seems that the shifting dynamics of the housing market, dropping house prices and the problems many potential purchasers are having trying to find a mortgage, has discouraged landlords from selling.
The results also suggest that sharply rising rents are giving landlords another reason to hold onto their properties.
David Potter, RICS East Midlands operations director, said: "Fears that landlords would take advantage of the more favourable capital gains tax regime to bail out of the buy-to-let market appear misplaced.
"Significantly, with the reduction in loan to value ratios by lenders leaving first-time buyers struggling to access the housing market, rents remaining steady and the expectation is that this trend will continue. Only two per cent of landlords are currently planning to sell properties at the expiry of tenant leases. The incentive to cash in on the lower tax rate is being outweighed by attractive yields."
The figures also dispel the fear that the housing market will have to cope with a sharp increase in new properties from the buy-to-let market.
RICS East Midlands member and estate agent, David Johnson, agrees. He said: “Having been based in the East Midlands area for over 38 years, I have witnessed the rise and fall of the buy-to-let market first hand.
“At the moment, I have seen no evidence that landlords in this area are thinking about selling. The market remains healthy and looks to be continuing in this way. Investing in a buy-to-let property is a long term investment and it is unlikely that owners would sell as a result of the recent changes in capital gains tax.
"For those who are looking at selling the reason behind it is more likely to be because the cost of borrowing is now too high and the risk of negative equity.”
