A finance chief is warning that the threat of possible rises in Capital Gains Tax should be dismissed by the government to help the buy to let sector.
Jonathan Samuels, the chief executive of Octane Capital, says: “The government has tried its hardest to dampen investment into the private rental sector in recent years, with a string of legislative changes around tax relief, stamp duty and tenant fees reducing the profitability of buy to let investments.
“The pandemic has also proved problematic for some landlords who have suffered lengthy void periods due to factors such as the tenant eviction ban and a reduction in rental demand across our major cities, in particular.
“Despite all of this, the sector has stood tall and continues to provide the vital rental market backbone that so many are reliant on.
“At the same time, the nation’s landlords have benefited from a considerable level of capital appreciation on their buy to let investment and the value of the sector as a whole has increased substantially.
“Let’s just hope that whisperings of a higher rate of capital gains tax remain just that, as any further increase could spur a reduction in available stock, causing the total value of the market to decline.”
His comments come after research by his firm which has revealed that the UK’s buy to let sector has grown substantially over the last five years, increasing by almost £240 billion.
Octane Capital analysed the level of privately rented stock across each region of the UK in relation to current market values to find the total worth of the sector. It then compared this buy to let bricks value to 2017 to reveal how it had changed over the last five years.
Octane says there are anestimated 5.5m private rental properties within the UK rental sector and based on current market values, Octane Capital estimates the total value of the nation’s BTL stock to be £1.7 trillion.
With just over a million private rental homes, the London market accounts for 19 per cent of the UK total. With the capital also home to the highest property values, it sits top of the buy to let sector at over £500 billion in value.
The South East is home to the next most valuable buy-to-let market at £247 billion with combined BTL values also exceeding £100 billion in the East of England, South West, the North West and the West Midlands.
Octane Capital estimates that the UK’s buy to let market has climbed by £239 billion since 2017, a 16.8 per cent increase.