Are you aware of how much more money you may have to pay in tax over the next few years as a result of the phasing out of mortgage interest relief between now and 2020?
Fresh research shows, somewhat worryingly, that 47% of all private landlords do not know what the changes in mortgage relief will potentially cost them over the next few years.
Although four out of five landlords questioned, as part of a new survey, were aware that the changes would eat into their rental yields, almost a third - 32% - were unsure what action they would take to maintain a consistent return and annual profit from their property portfolios.
James Davis, founder of Upad, which conducted the research, commented: “Although over half of all landlords don’t have debt in their portfolios, and therefore won’t be affected by mortgage interest relief changes – 21% of all landlords at least will be increasing rents to cover their higher cost base.
“This is understandable and forecasted – as the cost of fuel at the pump goes up as the price of oil increases – but yet again it will be tenants who lose out, paying an ever increasing proportion of their net pay on rent.
“Whilst the government continues to see landlords as a ‘political football’, it’s the nine million tenants in the UK who will actually be hardest hit.”
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Many Tenants won't actually pay more in rent because they will move to a lower cost property either smaller in size or in a cheaper area.
But for those at the bottom of the housing ladder this may not be possible and as is likely they'll not be able to afford to pay the higher rents will nd up being evicted, and declaring themselves as homeless to their Local Authority. Who are obliged to house them in expensive B&B accommodation as they have no homes of their own to house them, and private Landlords are increasingly not accepting homeless people/people on benefits as Tenants.
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