A recent study by Pegasus Insight has highlighted the potential for a more efficient eviction system to significantly boost buy-to-let (BTL) market investment. The research shows that 64% of landlords see an improved eviction process as a primary driver for growth.

Other key factors identified by landlords include lower taxes, with 61% advocating for a reduction in Capital Gains Tax (CGT) and the reintroduction of tax relief on mortgage interest payments. Additionally, 60% cited the removal of the 3% Stamp Duty surcharge as important for attracting more investment.

Interest rates were also a concern, with 59% of respondents indicating that a drop in mortgage interest rates below 4% would encourage them to invest. Stability and predictability in regulation were noted by 52% of landlords as significant factors for boosting their confidence in the market.

For landlords planning to sell in the next 12 months, the efficiency of the eviction process was even more critical, with 71% highlighting it as a paramount issue.

Conversely, a reduction in house prices was not seen as a major factor, with only 16% of landlords considering it important for encouraging investment.

Bethan Cooke, director of Pegasus Insight, stated, “This research provides valuable insight into landlords’ concerns.”

She added, “The fact that a larger proportion of landlords point to a more efficient evictions process as a greater spur to investment than a lower tax regime demonstrates how worried they are about the removal of Section 21 (no-fault evictions) in the Renters’ Rights Bill, which the government has confirmed it will introduce within the next year.”

Cooke also noted, “It is no secret that there is a massive backlog in processing evictions through the legal system, and industry bodies have warned that banning Section 21 could overwhelm the courts and prove the final nail in the coffin for some landlords.”

She concluded, “Our research demonstrates that, whatever form the new Bill takes, it must be considered carefully to take into account landlords’ concerns as well as tenants’, to prevent a decline in rental property numbers, and an accompanying rise in rents.”

In summary, the Pegasus Insight research underscores the importance of addressing the eviction process to enhance investment in the BTL market. Landlords also emphasize the need for favourable tax policies, lower interest rates, and stable regulations to foster growth in the sector.