Landlords blame tax – not regulations - as the biggest barrier to investment, according to the latest poll.

When asked what prevents them from investing more in rental property, landlord taxation ranks as the biggest barrier, (28%), way ahead of the Renters’ Rights Act, wider regulation (15%) property prices (12%) or economic uncertainty (9%).

Lettings and estate agent Benham and Reeves found that having more favourable landlord taxation would be by far the biggest incentive to buy more rental properties (36%) followed by lower Stamp Duty (13%), and a faster or easier possession process (12%).

Its research reveals that half of landlords (50%) still believe residential property remains a good long-term investment, with almost two-thirds (62%) intending to maintain their current portfolio over the next year. However, just 4% plan to expand. Profitability is also a concern, with 38% expecting the profitability of their buy-to-let portfolio to drop during the next 12 months.

Traditional

For those landlords who are considering investing, the traditional residential single-let remains by far the most attractive option, favoured by 48%, with HMOs trailing at 5% and student accommodation at 4%.

However, experienced HMO landlords are continuing to invest in their properties, with the largest proportion expecting to spend more than £10,000 on improvements over the next 12 months, according to new research from Paragon Bank. It reports that three quarters have been letting property for at least 10 years, with 80% intending to either increase or maintain their overall property portfolio.

Marc von Grundherr, director of Benham and Reeves, says the government should pay particular attention to the fact that more favourable taxation is the most common change landlords say would encourage them to invest again.

“The appetite for buy-to-let hasn’t disappeared, but we need an environment that encourages landlords to put additional capital into the sector,” he adds.

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