Landlords have consistently identified the reversal of Section 24 as the most significant factor that would encourage them to purchase more rental properties, according to the Property118 Landlord Sentiment Survey. This finding remained unchanged across two quarters, placing it ahead of falling interest rates, the scrapping of the Renters’ Rights Act, and lower Stamp Duty.
Section 24, introduced in phases from 2017, limited the ability of individual landlords to deduct mortgage interest as a business expense. Instead, it provided a basic-rate tax credit, which has led to some higher-rate landlords being taxed on turnover rather than profit.
The survey also highlighted a shift in landlords' intended ownership structures. In the second quarter, 53.1% of landlords planning to buy indicated they would do so through a company SPV, a slight increase from the previous quarter. Purchases in a personal name continued to decline, reaching approximately 29%.
Despite this intention, personal ownership still accounts for around 62% of existing holdings. The evidence suggests that moving personally-held properties into a company can incur significant Capital Gains Tax charges, making such restructuring costly for many landlords.