"Nobody" likely to enter the buy-to-let mortgage market

Date:Wednesday 9th September 2009
Author: Susanna Kavka

Without the prospect of capital gains and with so many costs now involved, its unlikely anybody will want to enter the buy-to-let market, says an expert.

Mark Butterworth, director at the Residential Landlords Association, claims that profit margins have been damaged so much by new fees and administration costs that many people are reconsidering whether it is worth renting properties in the current climate.

He highlights the high cost involved in licensing, energy performance certificates and tenancy deposits as the reason why landlords may decide to sell up.

"The climate is such that nobody is likely to enter the market with the regulatory regime stacked firmly against the landlord," he says.

Mr Butterworth suggests that the government may want to think about relaxing pension rules so that people could put capital into residential property through self-invested personal pensions.

This week, the Royal Institution of Chartered Surveyors reported that the net balance of surveyors reporting falls in rent as opposed to rises had fallen to 29 per cent in July, from 55 per cent in the previous quarter.