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

Estate Agent Talk

How can Cash House Buying Agencies thrive in 2022?

Like many other industries in the world, the UK property market is constantly evolving. Industry players therefore need to keep a keen eye on the key markers that define the state of the industry. As 2022 ushers in new changes and realities, industry players like cash house buying agencies need to arm themselves with current…
Read More
composite gates
Home and Living

Composite Garden Fencing / Gates – Pros & Cons

As much as many of us enjoy great relationships with our neighbours, we do also relish privacy between our properties / boundaries. Years ago I remember rows of gardens with no more that a wire fence with wooden posts separating each with some having missing sections and even those totally without. Many neighbours would have…
Read More
Breaking News

BREAKING PROPERTY NEWS – 30/06/2022

Daily bite-sized proptech and property news in partnership with Proptech-X.   Zoopla names new members of its Lettings Advisory Board, selected to support its goal to help inform how industry responds to a fast-evolving policy environment for agents, landlords and renters Zoopla, the UK’s most comprehensive property destination, is pleased to announce new members of…
Read More
Estate Agent Talk

Why Your Multifamily Building Needs An Access Control System

Being responsible for a multifamily building requires keeping safety a priority. Security can be a concern in a building with multiple people coming in and out, which is why your multifamily building needs an access control system. There are many reasons why an access control system can be of use to a dwelling with more…
Read More
empty property uk 2022
Estate Agent Talk

How many empty homes are there in England?

The total number of empty dwellings as at 13 September 2021 was 468,000 – a decrease of 11,000 or 2.4% on the previous year as quoted on the official government website: Local Authority Council Tax base England 2021 Long term empty homes are dwellings which are unoccupied for a period of 6 months or more…
Read More
Breaking News

New Research from TwentyEA Shows Available Stock Has Almost Halved Compared with Five Years Ago

Despite the fact that UK inflation has hit a fourty year high of 9%, agents across the UK are still seeing demand for properties outstripping supply, with new instructions largely flat during May, according to a recent RICS survey in June 2022. The RICS survey also suggests there is little prospect of more homes coming…
Read More