Sorting out the evictions process and making it more efficient would encourage landlords to invest more in the BTL sector, revealed the latest research from Pegasus Insights.
According to the study, 64% of all landlords surveyed would be more open to invest more in this sector if the evictions process would be made more efficient — going up to 71% for landlords looking to sell up in the next 12 months.
Lower taxes are the secondary driver for additional investment in the PRS, with a reduction in capital gains tax, the reintroduction of tax relief on mortgage interest payments and the removal of the stamp duty surcharge cited by over 60% of landlords as key to attracting more investment.
A drop in mortgage interest rates below 4% was identified by 59% of respondents, while 52% would be encouraged by more stability and predictability in regulation.
A reduction in house prices was not seen as a very influential factor in encouraging investment, with just 16% of all landlords identifying this as important.
Bethan Cooke, director of Pegasus Insight, commented: “The fact that a larger proportion of landlords point to a more efficient evictions process as a greater spur to investment than a lower tax regime demonstrates how worried they are about the removal of section 21 in the Renters’ Rights Bill, which the government has confirmed it will introduce within the next year.
“It is no secret that there is a massive backlog in processing evictions through the legal system, and industry bodies have warned that banning section 21 could overwhelm the courts and prove the final nail in the coffin for some landlords.
“When it comes to taxes, these results confirm that, if the government wants to encourage more investment in the PRS which plays a key role in providing homes for almost 20% of UK households, it would do well to consider reviewing the punitive tax regime which has been imposed on landlords in recent years, rather than increasing CGT or tightening the screw on limited company landlords, which many fear.
“Our research demonstrates that, whatever form the new bill takes, it must be considered carefully to take into account landlords’ concerns as well as tenants’, to prevent a decline in rental property numbers, and an accompanying rise in rents.”
