Brokers view tax legislation reform for property investors as having more of an impact on the bridging market than Brexit, according to a survey by InterBay Commercial, part of specialist lending group OneSavings Bank.
Over half, 52 per cent, said reform to tax legislation for property investors would boost the bridging market. Whereas only 27 per cent view the outcome of Brexit negotiations as the most important factor in driving growth in the market.
OneSavings Bank said the results show that despite policymakers’ current focus on Brexit, they should consider taxation changes in next Monday’s Budget. It says one in five, 19 per cent, of brokers felt that the removal of the additional 3 per cent stamp duty land tax for landlords would help to drive growth in the market. The bank was surprised only 16 per cent of respondents called for the reversal of the recent changes to the tax treatment of mortgage interest for landlords.
Other ideas brokers had for boosting growth in the bridging market were greater regulation in the sector, the reduction or removal of capital gains tax, a government subsidy for small scale developers and a financial subsidy for housebuilding across all tenures.
InterBay Commercial head of sales, Darrell Walker, says:
“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.
“While 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.”