Is the shine of being a property entrepreneur about to lost its sparkle?

We could be about to see an explosion of rental properties being sold as property investors ship out of the industry as new regulations tighten around them.

[UKPRwire, Thu May 10 2007] Government legislation could be about to end the dream for many property investors as the cost of more red tape turns the dream into a nightmare, reports a property expert.

Private landlords have just started to sign up to new tenancy deposit schemes. These were introduced to bring an end to unscrupulous landlords withholding tenants deposits for ‘cleaning’ or ‘replacing damaged furniture’ at the end of a tenancy term.

Now, as homeowners prepare themselves for energy assessments as part of Home Information Packs, so the nations landlords are preparing themselves for similar energy assessments from next year.

David Roberts of tickeverybox.com comments, “With associated costs continually eating into their bottom line, is it any wonder that landlords will look to seek rewards from ‘cheaper’ forms of investments?”

Property has never been a liquid form of investment due to slow purchasing and selling times, high entry and exit costs and high capital input. Add in the increase in interest rates squeezing rental yields and capital gains tax on disposal and the investment model starts to lose its appeal.

“Landlords have been able to counter these costs due to the UK’s property boom which brought with it distinct advantages to make the prospect of being a landlord particularly appealing, namely, high capital growth and increasing rental demand, adds David.

“However, for many landlords, a large proportion of who are self confessed amateurs, more legislation which brings with it more costs, could be the beginning of the end”.

How ironic it could be that landlords who purchased traditional starter homes from under the noses of first time buyers could be about to bring them full circle back to the market.