Property investment: What’s on the cards for residential landlords

How will landlords be affected by changes to Capital Gains Tax?

CGT is paid on profits you make when you dispose of a chargeable asset, such as a second property.

Every individual has an annual tax-free allowance which, for 2022/23, was £12,300. However, it was announced at Autumn Statement 2022 that this allowance will fall to £6,000 for 2023/24, and to £3,000 for 2024/25.

An individual disposing of a buy-to-let investment after 6 April 2023 will pay more CGT. Whilst consideration should be given to the timing of any disposals you have planned, for many it is already too late.

Is now the right time to invest in buy-to-let property?

This is really dependent on your circumstances, and what you want to achieve from your investment.

The often turbulent nature of the property market means that there are as many pitfalls to be wary of as there are opportunities; whilst, as aforementioned, demand for rental properties remains high in this part of the country, what house prices may or may not do in the months ahead remains to be seen.

Partner and property specialist at George Hay Chartered Accountants, Toni Hunter contemplates what property investment could look like for residential landlords in 2023, and whether now is the right time to invest, she explains how landlords will be impacted by changes to Capital Gains Tax (CGT) and shares her thoughts on the importance of having the right support in place.

What do you think 2023 will look like for landlords and property investors?

2023 could be a divisive year for landlords. Some will look to divest themselves of their portfolio, following relatively significant rises in bank base rates affecting mortgage costs, and taking into account the prospect of increased capital gains liabilities, as well as a wider cost of living crisis. Others will invest to take advantage of high demand and potentially higher yields. We are definitely seeing a different attitude towards highly leveraged property portfolios, with “derisking” becoming a more common strategy.

There may also be change to grapple with in respect of broader policy, with rental reforms afoot, a steer towards improved energy efficiency, and consultations on short-term lets expected.

Key to maximising the success of your portfolio is managing risk, watching your numbers and knowing who to turn to for timely, reliable and professional advice.

We collaborate with landlords and their advisers to ensure that they understand the best structure for their portfolios, that they are armed with the knowledge to make informed choices about their investment business, and that their strategy delivers what they expect against a shifting economic backdrop.

Whether you’re an established landlord, or preparing for your first investment, there are a few tickets left for our Q&A panel event on Thursday 13 April, where we’ll be joined by leading UK property expert Kate Faulkner, and other local property specialists. Search for ‘Property investment in a changing world’ in ‘Cambourne’ on Eventbrite.

To find out how we can support you with your property portfolio and investment objectives, call 01480 426500, or visit www.georgehay.co.uk.