Property Landlord advice: Lettings Sector set to grow on back of stamp duty reforms in buy-to-let market.

by Nick Strong, MD www.SelectYourFranchise.com

Lettings agent franchise networks are understandably excited about the potential for market growth in the buy to let market sector in 2011.  In the recent budget George Osborne made it easier for large investors to enter the buy-to-let market. 

 The coalition government has identified buy-to-let as a way of solving the housing crises that has been exacerbated by the difficulty of first time buyers accessing funding over the past two years of recession.

 Buy-to-let opportunities have therefore been opened by stamp duty reform.  So much so that Aviva, which has been lobbying for reform for some time is seeking to put together a £1billion fund which could be enough to purchase 5000 buy-to-let properties. This is because stamp duty on the purchase of more than one property will now be calculated by the average value of the properties, not the bulk value, which the industry has campaigned for.

 It is understood that other institutions and pension funds who have eyed the sector are Aegon, Terrace Hill, Legal & General, and LaSalle Investment Management. Property agent CBRE has estimated that institutional investors have allocated £7.5bn for residential property.

 It is thought unlikely that these initiations will want to manage their own property portfolios given the difficulties that the likes of Countrywide experienced when they entered the property market.

 There is clearly the opportunity potential for Letting franchise sector business to grow if large investing corporate decide to distribute their buy-to-let portfolio via agents with significant access to market across the UK.

 Steve Roulstone, MD of Castle Estates said ‘I have been lobbying for changes such as this especially through the pages of this site, for some time now, as I firmly believe that by easing the way for Landlords to start investing again we will start to build confidence in the property market again. Nobody is asking for financial restraints to be removed completely, as nobody sensibly wishes to go through a period of unrestrained growth that could then result, but sensible steps such as easing tax burdens imposed on Landlords can only help’.