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Higher CGT will hit landlords

publication date: Aug 9, 2010
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Nigel AtkinsonPropertyRisks predicts a shift in emphasis for private landlords from shorter-term capital gain to long-term investment income. While this will bring solidity to the rental market it also means that landlords will have to take a longterm view on income protection.

The firm also predicts that landlords will now begin to take a more defensive stance towards their investments.

Nigel Atkinson, Director, (pictured above) says, “Investors who entered the market in the buy-to-let mortgage boom will need to rethink their strategy if their intention was to capitalise on rising property prices. Professional investors too, will be less likely to sell and buy. This puts the emphasis firmly on rental income and the need to protect that income through insurance.”

 PropertyRisks points particularly to those investors who look to rental properties to generate a pension as vulnerable without insurance.

Nigel says that at the same time, with public spending cuts inevitably raising the threat of redundancies, the risk of tenant defaults is unlikely to diminish. “If you view rental income as investment income, the financial loss when a tenant defaults has the same impact as a dramatic fall in interest rates. The key difference is that this is a risk that landlords are able to cover with insurances.”