As predicted, Government shines light on buy-to-let to tackle housing crisis.

Prior to the Election in May 2015, Michael Riley, Director of Capital & Coastal, correctly predicted that despite which party came into power, it would only be a matter of time before the new Government “shone a light” on the buy-to-let industry as a way of tackling the lack of stock driving the country’s housing crisis.  Today, George Osborne has cut mortgage interest relief on buy-to-let homes in an effort to create a “level playing field” between prospective landlords and those buying their homes to live in.  Michael Riley comments on this potentially industry changing tax-relief crackdown.

“The biggest concern for landlords is that the government has now realised that it’s not healthy for the housing market to have multiple properties owned by individuals. Making multiple ownership less attractive by abolishing tax relief on buy-to-let mortgages will have a significant impact on the industry over the next five years as I believe today’s announcement is only the thin end of the wedge.

Limiting tax relief to those who fall into the basic 20 per cent income tax rate could force some landlords, particularly those with large loans, to sell up, and I think the London market, where property values are greatest, is likely to be most hit by the change. Suddenly a landlord with a £1000 interest payment has to find an extra £200 per month.

Some landlords may opt to increase rents but they will never be able to do so enough to cover the shortfall and tenants simply won’t pay it.  Some may try to shelter themselves against it by putting their buy-to-lets within companies but if they have a residential or buy-to-let mortgage they won’t be able to do that. I think there will also be a reduction in the number of people planning buy-to-let investment to fund their retirement.

Now that the wheels are in motion, it’s possible over the next 3-4 years, landlords will have to pay tax on all income derived from buy-to-let.”

Christopher Walkey

Founder of Estate Agent Networking. Internationally invited speaker on how to build online target audiences using Social Media. Writes about UK property prices, housing, politics and affordable homes.

You May Also Enjoy

Breaking News

Popping the Asking Price Bubble

Where in the Uk Can Buyers Snap Up Property Bargains and Where Properties Go for a Premium Above Asking Price   New research from fast selling property company, Upstix has uncovered the UK’s most surprising postcodes for snapping up a property at bargain prices this year, highlighting a widening gap between sellers’ expectations and the…
Read More
Rightmove logo
Breaking News

Highest demand to lease office space since pre-pandemic

The latest insights from the UK’s number one commercial property website Rightmove, reveals that the number of unique enquiries to lease office space is at its highest point since pre-pandemic, as businesses look for spaces that meet modern requirements. Demand to lease office space is 19% higher than the same period a year ago and…
Read More
Planning disputes on new build land
Estate Agent Talk

Planning consultations for major infrastructure to be streamlined

Robert Bruce, a planning and infrastructure partner at law firm Freeths LLP, said he: “Welcomed the change as a significant step to speeding up the DCO process and the focus on the quality and effectiveness of the consultation, rather than box ticking and a risk averse approach to pre-application consultation due to the current legal…
Read More
Breaking News

‘The property ladder pulls further away’ warns Open Property Group

For many first-time buyers across England, the dream of homeownership continues to slip further out of reach. Despite rising wages, soaring house prices are making it harder than ever to get on the property ladder. A leading UK professional house buying company ‘Open Property Group’ based in Buckinghamshire UK, has raised concerns over the ongoing…
Read More
Estate Agent Talk

How Long It Takes to Buy a House in the UK: 5 Common Delays That Can Slow Down Your Home Purchase

Wondering how long it takes to buy a house in the UK? The average timeline ranges from 8 to 22 weeks, but even that can stretch significantly due to unexpected delays, especially if you’re a first-time buyer or caught in a chain. That’s why working with experienced professionals like Belvoir — one of the UK’s…
Read More
Love or Hate Rightmove
Breaking News

Rightmove to host Renters’ Rights Bill webinar with Guild of Lettings

Rightmove is hosting a live and interactive webinar session with the Guild of Lettings to help agents get Renters’ Rights Ready. The webinar will take place from 10:00am – 11:00am on Wednesday 23rd April. Susie Crolla, Managing Director for the Guild of Lettings, will be joining Rightmove to help agents with questions they may have about…
Read More