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The Buy to let market has seen a series of changes over the past few years designed to restrict the benefits for many of owning more than one residential property. With the new Stamp Duty Land tax charges now in place and changes to mortgage tax relief on the way the effects of these measures may have a profound impact on the private rental sector. But what are the consequences for landlords?
Landlords who own more than one property have seen the financial outlook alter considerably with more changes still to come. Alongside the additional 3% Stamp Duty imposed on buy to let and second home mortgages, we also have the watering down of tax relief to the basic tax rate and the planned changes in taxation relating to the wear and tear allowance from 2017.
An introduction of the Mortgage Credit Directive (MCD) legislation, in March was designed to create a union-wide mortgage credit market and offer a higher level protection for consumers. Although this should not have a major effect on most landlords, it may mean that those who have inherited property or become ‘accidental landlords’ may find themselves subject for the first time to additional consumer safeguards.
Given the new measures were designed to calm down an overactive buy to let market, they will no doubt make some people think twice before considering a buy to let property, but with a buoyant rental market and investment in property as part of many pension plans there will still be many who find buy to let an attractive prospect.
As with any investment, It would be worthwhile for landlords and prospective landlords of buy to let properties and owners of multiple properties to research the local market and seek professional advice before entering into a transaction.
For further help and advice you can contact Phil Whitworth – DTE Financial Planning.
DTE Financial Planning is the trading name of DTE Risk & Financial Management Limited (registered in England number 01967512) which is Authorised & Regulated by the Financial Conduct Authority.
The Financial Conduct Authority does not regulate some forms of buy to lets or overseas mortgages
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