Cap­i­tal gains raid could lift larger buy-to-let lenders

The Daily Telegraph - Business - - Business - By Lucy Bur­ton

A TAX crack­down on sec­ond-home own­ers to help pay for the coro­n­avirus cri­sis could be a boost to banks spe­cial­is­ing in the buy-to-let mar­ket, ac­cord­ing to an­a­lysts.

John Cronin, a banks an­a­lyst at Good­body, said a po­ten­tial tax raid on cap­i­tal gains to plug gov­ern­ment debt could shake up the hous­ing in­dus­try by putting off part-time land­lords and cre­at­ing a gap that pro­fes­sional land­lords could fill, in­ad­ver­tently ben­e­fit­ing spe­cial­ist lenders OneSav­ings Bank (OSB) and Paragon Bank­ing Group (PAG).

“They have a bias to­wards lend­ing to pro­fes­sional land­lords so as more ‘am­a­teur’ land­lords in­cor­po­rate they be­come more at­trac­tive po­ten­tial cus­tomers to the likes of OSB,” he said. “Fur­ther pro­fes­sion­al­i­sa­tion of the mar­ket is a trend that is wel­comed by the listed spe­cial­ist buy-to-let lenders.”

His com­ments come days af­ter it was re­ported that Rishi Su­nak was weigh­ing up re­forms on cap­i­tal gains tax that would see peo­ple pay the same rate they pay on in­come tax. The tax raid would mean that sec­ond-home own­ers and those who have buy-to-let prop­er­ties would be taxed at 40pc-45pc in­stead of 28pc when they sell a home.

Bank shares have been ham­mered this year amid fears over loan losses, a slump­ing econ­omy, record-low in­ter­est rates and can­celled div­i­dends.

OSB chief ex­ec­u­tive Andy Gold­ing has pre­vi­ously said the bank has helped drive out what he calls “din­ner party” land­lords. Buy-to-let in­vestors are usu­ally non-pro­fes­sional land­lords who buy prop­er­ties and then rent them out, while the large land­lords that OSB tar­gets will have a port­fo­lio of houses in the tens or hun­dreds.

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