As property prices accelerate and first-time buyers struggle to afford to buy a home, the number of private renters has grown rapidly — from 2 million in 2000 to 4.6 million in 2021/2022, according to the English Housing Survey.

This comes at the same time that the number of Landlords is in sharp decline. According to recent research by the National Residential Landlords Association (NRLA), around 30 per cent of buy-to-let landlords are planning to either cut down their portfolio this year or leave the market altogether.

But why are they leaving?

The rot started in 2017 with the then Chancellor George Osborne’s Section 24, a hard-hitting tax measure to remove landlords’ ability to claim full tax relief on mortgage interest payments. There is some misconception that this measure took away interest tax deductibility completely – it didn’t, but it did stop higher rate tax relief and made many buy-to-lets unprofitable.

After this, the Government seemed to be waging a war on buy-to-let landlords, bringing in law after law seemingly to make being a landlord less attractive.

These laws, outlined in the Renters (Reform) Bill, include making no fault evictions harder, giving the tenant a right to have a pet in the home and limiting the number of rent increases allowed, amongst others.

In addition to this, the cost of mortgages has risen dramatically to remove the income element from investments making many of these properties a break even proposition.

With interest rates rising as well, many landlords are now comparing the return they can get from pure savings against the hassle of being a landlord.

A sting in the tail

With so many landlords leaving the market, of course the Government wants to take advantage, by increasing the rates of Capital Gains Tax and reducing the CGT allowance.

So, with such a hostile environment for buy-to-let landlords, you must ask yourself… who is winning in all of this?

Well, the first winner is anyone without a mortgage.  The tax deductibility of interest rates won’t affect you if you don’t have a mortgage – so rich landlords are the winners here.

The next winners are landlords who hold properties in companies as these are unaffected by the increase in CGT rates or the non-tax deductibility of interest rates.

Large corporate landlords in particular, such as Grainger PLC, are reporting record profits while smaller buy-to-let landlords struggle.

According to Corporate Watch the Government support Grainger including changed planning regulations and spending £4.5 billion to support the build-to-rent sector. Local authorities have given Grainger grants, loans and legal support, while bodies such as Transport for London and Lewisham council have set up joint ventures with the company.

So, while the smaller, middle-class landlords are squeezed the Government support the larger corporate landlords.

Something is very wrong here, but why I am not surprised!