15% of landlords cite stamp duty as their biggest investment challenge of this year according to research from Together.
According to research, 11% of BTL landlords are planning to exit the market, with 13% of those set to do so due to stamp duty increases and being priced out of the market.
With the changes taking place today, stamp duty surcharge on second homes rose from 3% to 5%, as was announced in chancellor Rachel Reeves’ Autumn Budget.
According to the Together research, 44% of BTL landlords still had strong concerns about Labour’s current plans and future policies for the BTL sector, believing these policies will negatively impact them.
while 61% of landlords are generally supportive of the new stamp duty regime, 23% have called for reform on additional properties.
The research went on to say that despite higher costs, wider economic pressures and policy changes being of concern, appetite within the BTL market remains resilient with investors adopting new strategies to deliver returns.
Together saw its own BTL lending increase by 16% to 2.2bn by the end of 2024.
Landlords also cited costs of upgrading homes to reach energy performance standards and the implementation of the Renters Rights Bill as concerns.
While 63% were optimistic about the proposed changes to energy performance rating improvements, 25% wanted to see the government prioritise tax relief or financial incentives for landlords investing in upgrades.
Commenting on the new changes Ryan Etchells, CCO at Together commented: “Higher Stamp Duty may trigger some individual, private landlords to carefully consider how these costs will impact their property plans.
“The government must consider the knock-on effect this will have on providing good quality rental stock which is a vital component of the housing market.”
Ryan went on to say that lack of affordability for FTBs means there is a greater reliance on rental properties, and continued, “constant attacks on the sector will only force landlords out of the market, reducing the number of properties available and forcing rent upwards, further impacting the ability to save for a deposit.
“As expected, nearly a quarter of landlords told us that the Labour government should prioritise “reducing or reforming” stamp duty on additional properties in order for the sector to be financially viable.
“That said, we have seen many amateur landlords decide to cut their losses and leave the market entirely, while many more are pivoting to the current climate.
“For example, we have seen many professional landlords looking to diversify their portfolios to spread the risk across residential classes as well as commercial sites.
Ryan added that Together had seen more landlords turning to student accommodation, social housing, mixed-use units and holiday lets to broaden income streams, with HMOs becoming more prevalent as Ryan said these can offer greater yield than single occupancy residency.
He continued, “while it’s disappointing that the new Stamp Duty charges are now in place, our customers tell us that there are still plenty of opportunities out there.
“Demand for rental homes remains, and landlords who can evolve to address these challenges will surely find success.”
