20 Jan ‘Buy-to-let is dead’ as commercial property investment soar
The number of buy-to-let investors moving to commercial property has tripled in the past three years, experts say.
Investors are fleeing traditional residential property and turning instead to shops, restaurants and offices as alternatives.
There are now less than three months until mortgaged buy-to-let properties become subject to a new, tougher tax regime which will see thousands of landlords in danger of falling into loss-making territory.
More than 100,000 landlords bought properties within limited companies last year – but many are now concerned that the Government might move to make these subject to tougher taxes too.
George Walker, commercial auction partner at Allsop, said the auction house has seen three times the number of buy-to-let converts dipping in to commercial property since the tax changes were announced.
“We’re getting a lot of investors into our market because of the changes to buy-to-let. Once they have bought one, they can’t believe the simplicity and want to do it again,” he said.
Graham Chilvers, a seasoned landlord with 30 years’ experience, has turned to commercial property for this reason.
He doesn’t plan to sell any of the 75 properties he has bought over the years, and is confident that he will be able to continue paying his mortgages, as they are all relatively small.
But he won’t buy any more – and is already committed to commercial property.
“I thought about going down the limited company route, but I understand the Government are already looking into closing that loophole, and I think it would cost too much to do” he said.
Moving property into a limited company can also have significant tax implications, with owners potentially incurring stamp duty and capital gains tax liabilities.
Instead Mr Chilvers will continue to buy property, but will focus on garages, commercial buildings and industrial estates instead.
Source: Daily Telegraph by Olivia Rudgard
Contributor: Julia Hardy