Buy-to-let boom coming to an end? One in five landlords going out of business hit hard by tax break cuts
Could the buy-to-let boom be coming to an end?
The possibility of lucrative returns may have prompted many to invest in a buy-to-let property, but a new study suggests being a landlord may not be such a sure-fire investment after all.
One in five landlords are forecast to be out of business within the next two years, according to the annual Landlord Report from legal firm Access Legal.
Landlords are losing billions every year, the study suggests, as rent arrears, damages and repairs are costing close to £10bn annually.
Almost half of landlords surveyed had experience of tenants not paying rent, and unpaid rent costs some £900m a year. But damages and repairs are the biggest cost, as each costs landlords some £4.5bn a year.
Buy-to-let landlords were hit hard by changes announced by chancellor George Osborne in his summer Budget, as tax breaks for the group were curbed.
Osborne moved to cut mortgage interest relief for landlords, in order to create a more “level playing field” between those buying a home to live in and those buying to let.
A significant number of the new landlords are Britons nearing retirement age, investing in property to fund their retirement, as a survey in April found that one in ten over 55s owns a buy-to-let, a new category dubbed "silver landlords" or "gran-lords". But this investment may be riskier than it seems, and pensions experts have previously warned against it.