“Long-Term Investment Is Secret To Success,” Says CEO Mike Goddard As Government Plans Rise In CGT
Mike Goddard, CEO of Belvoir, one of the UK’s largest specialist lettings agencies, advises a wait-and-see policy for investors who may be worried about Government plans to raise Capital Gains tax (CGT).
“It looks highly likely that CGT is going to increase at the emergency budget, probably as a direct consequence of the Coalition Government having to raise the revenue necessary to pay for an increase in the income tax threshold to £10,000,” says Mike. “However, I think it will be unwise to jump to too many conclusions until we have seen the finer details of the government’s proposals, as we don’t yet know what the new rate will be or whether there will be benefits that may help to counter any increase.
“As a specialist lettings agency Belvoir has always advised investors to be cautious about investing in property purely because of its potential capital appreciation. CGT always depends on a rise in capital appreciation and any investment decisions should be based on the rental yield that can be achieved from a property. If buy to let property is viewed as a long-term investment, based on the rental that can be achieved now and an increase in that rent over the years, then capital gains becomes less important.
“Secondly, until we know the full details of the Government’s proposals we will not know if there are any plans to offset an increase in CGT. There may, for example, be plans to include taper relief (i.e. the longer you hold your asset the less CGT you have to pay), which was enforced some ago and was then phased out.
“At present I don’t think we need to view the situation with the rental market as all doom and gloom, particularly for those investors who are in this business for the long haul. I strongly advise potential investors to always seek the advice of a specialist lettings agent who is able to provide realistic and unbiased advice about rental yields.”
•Belvoir was founded in June 1995 by Mike and Stephanie Goddard. Its Central Office is in Grantham, Lincolnshire.
•Mike Goddard is Chairman of the British Franchise Association (bfa) and in 2009 was voted Leader of the Year by the Negotiator magazine.
•Mike Goddard now sits on the Board of Directors of the Property Ombudsman.
•Belvoir is recognised as one of the largest specialist letting franchise agencies in the UK, with more than 140 franchises nationwide and aims to have 300 franchises in the next ten years.
•In 1991, 7% of UK households were privately rented. Between 1992 and 2000 this increased by 43% and Belvoir predicts this will increase by a further 50% in the next few years.
