The number of landlords who understand the personal implications of the Government’s changes to tax relief, which come into effect this month, has risen to 78%, according to a new survey.
Paragon Mortgages’ latest Private Rented Sector (PRS) Trends Report for Q1 2017 is based on interviews with 203 experienced residential landlords. Focusing on the awareness of the Government’s reduction in buy to let mortgage interest tax relief, the report found that 78% of landlords surveyed demonstrated an understanding of how these changes would impact their personal circumstances. This is an increase of 8% from Q4 2016.
The report also found that as a consequence, a smaller percentage of landlords (7% down from 11%) said that they did not understand the implications and that fewer landlords said they required more information (13% down from 18%). The Paragon report said this was ‘further indication that landlords are preparing for the impact of the changes.’
As part of the study, Paragon also studied sentiment amongst landlords and found that landlord optimism was stable in Q1 2017, with the overall rating of prospects for the PRS over the next 12 months now at 6.7.
Paragon says that this demonstrates a ‘modest upward trend since 2016’ and suggests confidence is returning amongst landlords following a turbulent 18 months. Paragon states that landlords are gaining greater understanding of the pressures they are likely to face and developing strategies to mitigate at least some of the impact.
John Heron, Managing Director at Paragon Mortgages, said:
“It’s encouraging to see that the PRS has not been negatively impacted to the degree that had been widely predicted, despite some turbulence over the last couple of years. This increase in understanding combined with effective financial planning may be the key drivers behind a steadier picture in terms of overall optimism amongst landlords.
“However, we remain cautious, as landlords will not be fully impacted for some years yet and, whilst we have been able to track a modest recovery in confidence since 2015, the sector is still some way off its peak; the PRS is finely balanced and will remain so for some time.”
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6th April 2017