As one of Cardiff’s largest letting agents, we help thousands of landlords rent out their apartment, flat or home to tenants across the Welsh capital every year, and we have seen the number of landlords in the city grow steadily over the last few years. The growing number of landlords in Cardiff appears to reflect a similar trend across the UK, as new figures from HM Revenue & Customs (HMRC) show that 1.75 million people declared property income in 2013-14, which represents a 7% increase on the 1.63 million people in 2012-13. According to the data, which was published by estate agent ludlowthompson, landlords received a combined total of £14.2 billion in income from their rental properties in 2013-14, up on the £13.1 billion recorded in 2012-13.
The figures from HMRC are the most recent statistics available and suggest that landlord numbers are on the rise because buy-to-let lending has increased rapidly thanks to cheaper mortgages, rising rents and low saving rates, all of which make property a very attractive and sound investment. With property prices rising sharply across the country over the last two years, many people are seeing property as a way to increase their income. The 2013-14 figures are the most recent available, and many property experts believe that landlord numbers are actually much higher than 1.75 million because of the spike in buy-to-let purchases in early 2016, before new stamp duty tax changes came into effect.
The spike in landlord mortgages in early 2016 before the stamp duty changes indicate that the buy-to-let market remains a popular form of investment as many investors are drawn to the attractive return on investment they deliver. Investors are also looking at property because it is a less volatile form of investment compared to more high-risk alternatives, such as investing in stocks.
Despite a record number of landlords in the UK, the changes to stamp duty tax are likely to have an impact on landlord numbers going forward. From 1 April 2016, the upfront cost of buying a property increased, with a 3% surcharge added onto purchases of a second home. It is expected that from 2017, ongoing costs to landlords who currently pay the higher rate of tax will increase as mortgage relief is slowly removed. Property experts believe that some landlords will be priced out of the buy-to-let market as a result of the changes, but others believe landlords will simply mitigate the effects by making changes.
The National Landlord Association (NLA) has said that it thinks some landlords will stop renting to high-risk tenants as a result of the stamp duty changes, while others are likely to offset the rise in tax by increasing monthly rents for their tenants. The NLA continued to warn about tenants being priced out of the rental market by increasing rents, government benefit cuts and the reduction in mortgage interest relief currently enjoyed by many landlords.
Are you looking to rent a property in Cardiff, or perhaps you’re a landlord looking to put your buy-to-let investment on the market? If so, as Cardiff’s largest lettings and estate agency, we have the experience and knowhow to help. Our tenant services can help tenants find their perfect Cardiff flat, apartment or house, and our landlord services can help investors achieve the maximum return on investment. To find out more about how CPS Homes can help you, get in touch today on 02920 668585, email firstname.lastname@example.org or pop into our Woodville Road branch in the heart of Cathays.