Landlords have confidence:
Buy-to-let confidence is beginning to return at the end of 2016 as landlords prepare for a turbulent 2017.
2016 has been a rollercoaster ride for the UK’s private rented sector, with the ride mostly going the wrong way for landlords, thanks to a string of measures introduced by the Government to clamp down on buy-to-lets. In April 2016, a new stamp duty surcharge was introduced for second home purchases, including buy-to-let properties; the Bank of England is beginning to take steps to tighten buy-to-let mortgage lending; and April 2017 marks the beginning of a phased reduction of mortgage interest tax relief for investors, which will leave landlords paying tax on their revenue, rather than profit, impacting the viability of a buy-to-let investment.A challenge for a judicial review of the latter tax change was denied earlier this year, but landlords and other professionals within the property industry continue to lobby for a U-turn on the new rules. If the tax changes go ahead which is more than likely it will leave investors with little choice but to raise rents to make ends meet. The recent Autumn Statement was criticised by campaigners as a missed opportunity to reverse this tax change, with Chancellor Philip Hammond instead announcing a ban on letting agent fees, which could see yet more costs passed on to landlords and tenants.
A growing number of landlords are turning to incorporation, and borrowing through a company structure, where finance costs can still be offset against rental income. Analysis shows that there have already been more than 250,000 limited company loans issued in the first nine months of the year, double the total amount in the whole of 2015.
Even after all this turmoil when asked landlords still have confidence to continue and in some cases, increase their business.
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If you are looking for a new or re-mortgage, please do make contact and one of our qualified advisers will be happy to assist.