Residential property prices could be on the verge of falling sharply largely because of the government’s buy-to-let tax changes, according the head of Landlord Mortgages.
The changes to stamp duty, tax relief and new tougher mortgage application rules could make it harder to make a profit from letting property, which in turn could deter investment in the sector and drive home prices down.
Aside from the extra 3% stamp duty surcharge, the amount landlords can claim in mortgage interest relief will be limited to 20% from 2017, which will eat into many landlords’ rental returns, especially higher and additional rate taxpayers, making buy-to-let a far less attractive proposition.
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But if Nick, Robert & Felicity (who just own property to live in) also see the value of their homes fall, the "vote winner" might just turn into a vote loser - there are many more homeowners than landlords !
Politicians often fall foul of the unintended consequences of their actions. They're really not terribly bright !
Yes but Nick, Robert & Felicity stuck in a 1 bed flat with their children see prices fall then the gap in the next step of the ladder shrink and they can move into a family home.
Meanwhile Sophie, Luke and Mohamed can finally afford to get onto the property ladder.
Section 24 is helping to address inter-generation inequalities.
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