In a recent study conducted by the National Residential Landlords Association (NRLA), it has been found that a number of landlords considering exiting the private rental sector have postponed their plans due to the perceived burden of Capital Gains Tax (CGT).
The association’s regular quarterly survey unveiled a significant trend, with 45% of respondents citing CGT as a crucial factor influencing their decision to retain properties for a longer duration than initially envisioned when entering the landlord realm.
In a different segment of the survey, landlords with properties rated Energy Performance Certificate (EPC) D or below expressed their intentions in response to potential reintroduction of minimum energy efficiency standards. More than half of these landlords indicated that they would either sell some of their properties or exit the market entirely if such minimum standards (referred to as minimum C plans) were reinstated. Moreover, a noteworthy 85% of surveyed landlords voiced strong support for financial assistance to facilitate energy efficiency improvements, deeming it essential for elevating minimum standards across the sector.
On a broader scale, the survey pointed towards a positive shift in landlord confidence, marking a contrast to several quarters of record lows. The sentiment, reflective of the third quarter of 2023, demonstrated a 7.9% increase in optimism compared to the preceding three months.
The NRLA attributed this newfound confidence to multiple factors. Firstly, the government’s abandonment of plans to implement a minimum energy efficiency rating of C in rented homes was highlighted as a contributing factor. Additionally, a decline in inflation rates and the announcement by Michael Gove that the removal of Section 21 would only occur post the completion of court reform were identified as key elements shaping the improved outlook.
Encouragingly, the surge in confidence was observed uniformly across all regions surveyed, indicating a widespread positive shift in the landscape for landlords.