The Intermediary Mortgage Lenders’ Association (IMLA) is urging the Government to stop its crackdown on the buy-to-let market.

The calls come following evidence which shows the negative impact the tax changes have had including forcing some landlords out the private rented sector.

The IMLA says its findings reveal that that landlords with one buy-to-let property made up just 21% of the private rented sector in 2018, down from 40% in 2010. Over the same eight-year period, landlords with five or more properties in the private rented sector had increased by 10% – from 38% to 48%.

The Royal Institution of Chartered Surveyors has also expressed concern after their latest figures confirmed that tenant demand is rising while the number of new landlords entering the market is dwindling.  

A separate study released by the Residential Landlords Association earlier this year also found that a quarter of private landlords are looking to sell at least one property over the next year.


What changes have landlords faced in recent years?



Stamp duty land tax surcharges

Landlords were left reeling when the Treasury announced a 3% stamp duty land tax (SDLT) surcharge on the purchase of additional properties back in November 2015. That surcharge sits on top of the various existing SDLT rates that apply to the purchase of homes in England worth more than £125,000. 


Tax relief on mortgage interest

From April 2017, tax relief on mortgage interest began to be phased out a rate of 25% a year. After April 2020, this relief will be replaced by a basic-rate tax reduction.


Ban on tenant fees

Most recently, a ban on tenant fees in England came into place on 1 June 2019. It’s estimated that this move will cost landlords an estimated £83 million in the first 12 months alone.

New rules mean that landlords and letting agents in England can no longer charge tenants any additional fees when they sign up for a new rental property. Fees will be limited to charges for replacement keys and late rent payments only and security deposits will be capped at the equivalent of five weeks’ rent and holding deposits to one week’s rent.

While a government analysis suggests that tenants will save an average of £300 every time they move, rents are projected to rise by around 2% at the national level over the coming 12 months.


What impact is this having?

Overall growth has slowed, with the IMLA’s figures from 2017 reporting the first annual decline in the number of private rented sector properties since 1999.

The trend is expected to be mirrored, and possibly exacerbated, when data for 2018 and 2019 is published in the near future.

In the report, the IMLA says:

“We are concerned with the amount of additional regulation that has impacted both the private rented sector and buy-to-let sector since 2015. We think the authorities should take time to evaluate the impact of existing changes before introducing any further adverse tax or regulatory measures.”


If you’re a landlord and have any concerns about the impact that new legislation is going to have on you, please get in touch with our tax, payroll and accounts manager, Peter Bowyer.


 For all your other tax needs, head to our blog ‘everything you need to know about personal tax planning’ or you can also download our free tax card from our home page which details all the rates you need to know for the 2018/19 tax year.

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