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Investors previously scared of Chancellor George Osborne's Capital Gains Tax (CGT) hikes have flooded the buy-to-let market after expressing relief at the softened increase. Prior to June's Budget, buy-to-let investors were openly voicing concerns over an alleged hike in CGT, up to 40% according to some experts. But, after the tax rose to a lesser 28%, property brokers are beginning to report renewed interest in the private rented sector. “The bogeyman has gone away and the argument for investing in property remains strong,” David Whittaker, Managing Director of Mortgages for Business, told the Financial Times. “Confidence is returning and we've certainly seen a pick up in interest from potential buyers.” Since the recession's assault on national finance, the buy-to-let market has undergone a lack of interest and investment over recent years. As investors began to consider re-entering the market, the expected CGT hike forced many to reconsider, worried that any time spent refurbishing properties would be made redundant by increased payments to the taxman. But the sector is beginning to show strong signs of recovery, according to Moneyfacts.co.uk, as the number of buy-to-let loans has risen by 50% since September last year. “The buy-to-let market was one of the biggest casualties of the credit crunch, with lenders pulling out of the market en masse, raising rates and fees, and tightening criteria. But it has received a boost in recent weeks with welcome signs that lending conditions are finally starting to improve,” commented mortgage broker Melanie Bien. Coupled with investor improvements, tenant demand has also displayed promise, with London 's corporate sector beginning to emerge from the recession's wake. The capital's estate agents have reported an increase in demand for high-end rental properties from corporate tenants, up to 35% in some cases. But, while the future remains largely unclear, seeking advice before investing in what has become a volatile market over recent times could be the key to success.
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