"The swathe of tax changes in recent times have left an indelible mark on the bridging and wider buy-to-let market."
52% of brokers believe that reform to tax legislation for property investors would boost the bridging market, double the number who view the outcome of Brexit negotiations (27%) as the most important factor in driving growth, according to a survey by InterBay Commercial.
The research found that reversing recent tax reform that has hit landlords and the wider buy-to-let market was a top priority for brokers. One in five (19%) felt that the removal of the additional 3% stamp duty land tax for landlords would help to drive growth in the market, whilst surprisingly only 16% called for the reversal of the recent changes to the tax treatment of mortgage interest for landlords.
Other changes to tax legislation highlighted by brokers included the reduction or removal of capital gains tax, a government subsidy for small scale developers, and a financial subsidy for housebuilding across all tenures. In addition, some brokers believed that greater regulation in the sector would help to boost growth in the bridging market.
In comparison, the survey revealed that just 27% of brokers saw Brexit as the biggest potential support for market growth. 15% of brokers thought that no Brexit at all would be the most beneficial element, one in ten thought a ‘soft Brexit’ would positively impact the sector, while just 3% saw a ‘hard Brexit’ as positive.
Darrell Walker, head of sales at InterBay Commercial, said: “The swathe of tax changes in recent times have left an indelible mark on the bridging and wider buy-to-let market. Some landlords have been forced to recoup higher tax costs through higher rents, others no longer have the funds to refurbish properties, and many amateurs have left the market altogether.
“At a time when the supply of affordable property across all tenures remains a key economic challenge across the country, taking steps to encourage, rather than deter investment into the sector would go some way to alleviating our current housing crisis. Taking a second look at the tax burden investors must shoulder is a good place to start. Whilst Brexit is understandably top of the Government’s to do list as the Chancellor prepares for the Budget, supporting the property market cannot and must not be forgotten.”