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