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UK Rated Amongst Worst European Countries for "Landlord Friendliness"

It has been a tough few years for rental property owners. Many have left the industry while others have stuck it out and simply adapted to the changes. But it was recently confirmed what many landlords already knew – that the environment is not in a good place right now. In fact, the “landlord friendless” of the UK is one of the lowest anywhere in Europe.

 

Who is Claiming the UK is Unfriendly Towards Landlords?

An organisation called WorldFirst, a market leader in taking international payments, examined a wide range of statistics released by governments, including survey data of the affected businesses. They found that in the UK, there was mass discontent over changes to how landlords are taxed, the hikes in stamp duty for the BTL market, and increasing regulations affecting business.

This information was confirmed by the newspaper The Daily Telegraph which showed that in 2018, the UK was 15th in the European list. But in January, we had dropped to 25th. The most critical change that is said to have affected this drop is the changes to Section 24 which not only added Stamp Duty surcharges, but also reduced how much interest a property owner against a BTL mortgage.

 

Dropping Profits and Stagnant Market

The government has looked long and hard at the BTL market in a bid to ensure affordable rents. But industry analysts say that the average yield for landlords has dropped from 5% to 4% in the last year alone. As a result, investment in new BTL property for existing landlords is low and the market is stagnating. When April comes around, there will be further restrictions to mortgage rate relief.

A shortage of rental properties is having the opposite effect of what was intended by the changes – average rent is increasing which is not great news with the economic uncertainty of the global market and the potential problems caused by the Brexit process. Some campaigners are asking for the government to reduce the amount of stamp duty on property purchases.

From 2020, unless the plan changes, landlords will be unable to claim any mortgage interest relief. However, it is important to remember that it is still a better ROI than any other form of investment right now.

 

Comparing Other European Nations

The UK is now in the bottom five countries. Accompanying is Austria, France, Croatia and Sweden (in that order) listed as performing worse at present. Countries that surpassed the UK since the last poll include Italy and Greece, two of Europe’s worst performing economies, Croatia, and Finland. Ireland tops the poll, being chased by Malta, The Netherlands, and Portugal.