Still a very sound investment

UK buy-to-let landlords will still benefit from £16.7bn worth of tax relief after the government’s changes to the system are fully implemented by 2020.

The tax relief allows buy-to-let property landlords to offset against their rental income expenses like mortgage interest and other costs including property repairs, maintenance and renewals, legal costs, management and professional fees; and rates, insurance and ground rents. Despite tightening, buy-to-let tax breaks are still very valuable, highlighting that rental property remains a highly attractive investment vehicle in the long term.

People always seem to overlook the fact that property values are increasing all the time, this added to profits can give a very good return in the long term on money invested.

The Treasury said it expects the amount of taxes it collects from landlords to rise by £840m a year by 2020-21 after its cuts in tax reliefs on interest payments and property maintenance.

Government data showed landlords claimed £17.5bn in property expenses in the last year. Landlords claimed over £7bn in tax relief on mortgage interest and other financial costs, while £3.7bn was claimed for property repairs and maintenance.

After planned changes to tax relief are fully implemented, landlords will still be able to claim approximately £6.4bn on interest rate costs alone.

The choice of plans open to landlords is vast both in new and re-mortgaging. It is always recommended to seek advice from a broker, they will have full access to all the advantageous rates which in turn can save you thousands per year.

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If you would like help with your new or re-mortgage please do get in touch and one of our advisers will be happy to guide you.