JANUARY 04, 2016 | BY A & S Property
KPMG predicts higher rents in 2016 as tax changes hit
Accountants KPMG has warned that the upward trend in buy-to-let may reverse in 2016 due to the tax changes being introduced this year and beyond.
The firm has warned that the stamp duty hike for landlords could result in developers struggling to sell new build property while reduced supply of rented property could mean higher rents for tenants.
According to figures from the Council of Mortgage Lenders, the number of buy-to-let loans increased nearly 28% from October 2014 to October 2015, with the value of loans increasing by almost 36% in the same period. But KMPG warns that these trends could reverse this year.
Dermot Callinan, head of private clients at KPMG in the UK, pointed out that the past four years have seen 14 tax changes targeted at residential property and in particular buy-to-let landlords, making the economics of such an investment less and less attractive.
Callinan warned that if large numbers of landlords take the decision to sell leading to a significant amount of second hand stock being put up for sale, this will have an impact on the housing market and could also cause problems for some developers reliant on investors to maintain the current rate of sale.