Finding mortgage finance will be the biggest challenge for amateur landlords in future, according to broker Private Finance.
It warned that the buy-to-let market faces a series of threats, including the cut in higher rate tax relief, the stamp duty increase and the outlook for house prices and yields.
The European Mortgage Credit Derivative (MCD) may also have a negative impact.
Private Finance said these factors are unlikely to dampen the market altogether and buy-to-let remains attractive to investors.
It said investors in a typical commuter town could still generate a potential 62% return on capital if the investment is held for at least five years with a fixed rate mortgage at 3.6%.
Simon Checkley, managing director of Private Finance, said buy-to-let still remains viable even if house prices grow less than 5% a year.
“These figures assume the tax relief reduction and stamp duty hike so the short-term returns could look more attractive if you complete a purchase before 1 April 2016 when the increased stamp duty will apply.”
Checkley said that loss of higher rate tax relief and the increase in stamp duty on the market pose a problem but were not necessarily deal breakers.
“There are still opportunities in this market if an investor makes a sound purchase subject to other underlying economic factors.
“Understandably, many landlords are claiming they will lose considerable sums of money as a result of these changes. However this does beg the question of the true viability of their original investment.”
Checkley said it can be difficult in London because high house prices mean yields remain relatively low.