How to beat the new landlord tax & mortgage changes

How to beat the new landlord tax & mortgage changes

Major new lending restrictions and tax changes won’t throw your investment strategy off course if you act now.

Ex-Chancellor George Osborne made no bones about wanting to deter landlords in favour of first-time buyers and, to that end, his policies have arguably been successful.

Buy-to-let purchase lending slumped 46% in the second quarter of 2016 after the 3% Stamp Duty surcharge was introduced, and it still hasn’t fully recovered.

It’s been a challenging few years for landlords, as a raft of measures targeting the private rental sector have been introduced by Government and regulators.

The Stamp Duty surcharge was a clear deterrent to portfolio expansion, Right to Rent checks added more paperwork and the tax relief changes are set to hit many landlords’ profits.

Osborne may be long gone from the Cabinet but the changes keep coming.

The latest tightening of buy-to-let mortgage lending rules, introduced just weeks ago, could affect your ability to raise finance on your existing properties, remortgage or get a new loan to grow your portfolio.

Time to thrive

The good news is that landlords are far from beaten by this slew of government policy.

Some may have delayed expanding their portfolio, others are moving into the perceived shelter of a limited company structure, and a small number have exited the sector.

But most are taking time to understand the new rules, adapting their strategy and thriving. That’s because, despite the challenges, landlords are currently supported by robust fundamentals that make investing in property highly attractive.

Rents are high, up 2.1% between August to September to a UK monthly average of £927, according to Homelet. Void periods are low, yields steady and tenant demand is outstripping supply.

Buy-to-let mortgage rates are now at an all-time low, with two-year fixed rates at 2.86%, and the number of products on offer at a post-credit crunch high, according to Moneyfacts.

There is still huge potential for those investing in property to let, but you can only win if you play by the new rules. Smart property investors do just that, by keeping up to date, adapting their long-term investment strategy and planning ahead.

Tax relief changes – what you need to know


How to beat the new landlord tax & mortgage changesChristina Hoghton has been writing about mortgages and property investment for 17 years, for magazines, newspapers, major lenders, challenger banks, trade bodies and brokers. After a stint in London working as an editor for a financial publisher she returned to Manchester, as a freelance writer and communications consultant. Christina also holds the mortgage adviser qualification, CeMAP. She’s a mum of three, Man City fan and, now she’s back up North, finally a homeowner.

Disclaimer Please note – This is not tax or mortgage advice, it is just a broad overview of the recent changes. Please consult a professional who can assist you with your personal circumstances and how these changes might effect you.

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