No sign buy-to-let investors selling up

LONDON (Reuters) - Rising rental yields mean buy-to-let investors are not taking advantage of recent tax changes to flee the market, a survey by the Royal Institute of Chartered Surveyors shows.

The survey conducted over the past two weeks showed only two percent of landlords planned to sell properties at the expiry of tenant leases.

Changes that took effect at the start of this month mean most buy-to-let landlords are now subject to capital gains tax of 18 percent, down from as much as 40 percent previously.

"Fears that landlords would take advantage of the more favourable capital gains tax regime to bail out of the buy-to-let market appear misplaced," said RICS chief economist Simon Rubinsohn.

"The incentive to cash in on the lower tax rate is being outweighed by attractive yields."

After a decade in which house prices have tripled, British property values began to turn lower at the end of last year as tighter credit conditions added to affordability constraints.

The flipside has been rising rental yields as potential first-time buyers stay in rented accommodation for longer.