Capital gains tax warning from CFO celebrating…


A finance chief warns that the threat of possible capital gains tax hikes should be brushed aside by the government to help the buy-to-let sector.

Jonathan Samuels, managing director of Octane Capital, said: “The government has done its best to curb investment in the private rental sector in recent years, with a series of legislative changes relating to tax relief, stamp duty and rental costs reducing the profitability of buy-to-let investments.

“The pandemic has also proven problematic for some landlords who have suffered long empty periods due to factors such as tenant eviction bans and reduced rental demand in our major cities, in particular.

“Despite all of this, the sector has held firm and continues to provide the vital backbone of the rental market on which so many depend.

“At the same time, landlords across the country have benefited from a considerable level of capital appreciation on their rental investment and the value of the sector as a whole has increased significantly.

“Let’s just hope that the rumors of a higher capital gains tax rate remain as they are, as any further increases could lead to a reduction in available inventory, leading to a decline in the total market value.”

His comments follow research by his firm which found the UK’s buy-to-let sector has grown significantly over the past five years, growing by almost £240billion.

Octane Capital analyzed the level of privately leased inventory in each region of the UK against current market values ​​to determine the total value of the sector. He then compared that purchase to leave the value of the bricks to 2017 to reveal how it had changed over the past five years.

Octane says there is a estimated at 5.5 million private rental properties in the UK rental sector and based on current market values, Octane Capital estimates the total value of the country’s BTL stock at £1.7 trillion.

With just over a million private rental properties, the London market represents 19% of the UK total. With the capital also home to the highest property values, it sits at the top of the buy-to-let sector with a value of over £500bn.

The South East is home to the second most valuable buy-to-let market at £247bn, with combined BTL values ​​also exceeding £100bn in the East of England, the South West, the northwest and the West Midlands.

Octane Capital estimates that the UK buy-to-let market has grown by £239bn since 2017, an increase of 16.8%.

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