In the aftermath of new tax rules that have hit landlords recently, a new report reveals that just one in five believes that there is still money to be made in buy-to-let.

The research also shows that over half of landlords purchased buy-to-let property in the last three months to beat the Chancellor’s stamp duty reforms, which came into force earlier this month. The study, conducted by PropertyLetByUs.com – a leading online letting agent, reveals that 43% of landlords are considering putting their properties into a limited company to beat the tax rises. Only 5% of landlords have sold buy-to-let property because of the increased tax burden and just 6% plan to reduce their property portfolio and invest their capital in stocks and shares.

Despite all the rhetoric about death of buy-to-let profits, only one in six landlords are seeing a reduction in their profits.

Jane Morris, Managing Director of PropertyLetByUs.com comments: “Our research shows that landlords are fairly upbeat about the BTL market and many of them appear to have strategies in place to off-set the tax hikes. Many landlords are opting for incorporation, at the same time as raising rents.

The latest figures from the HomeLet Rental Index reveal that between January-March 2016, rent on new tenancies signed on rental property outside of London were, on average, 4.9% than in the same period of last year. The figure in Greater London was 7.7% higher than a year ago, although Scotland wasn’t far behind with an increase of 7.3% in the same period, just ahead of the East Midlands with 6.8%.

The surge in landlords investing in buy-to-let property in the first quarter of 2016, has created a bubble of new rental properties in some parts of the UK. However, in the longer term, it is likely that the tax changes will limit the supply of rental property and discourage potential new landlords from investing in the buy-to-let market. The good news is that tenant demand will continue to rise, as unaffordable house prices push home owning out of reach for many people.”

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