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TODAY'S OTHER NEWS

Buy-to-let tax u-turn needed to ensure PRS ‘continues to perform well’

Given that Britain will soon have one of the toughest tax regimes for private landlords in the western world once mortgage interest relief is finally phased out in 2020, deterring many existing buy-to-let landlords from adding to their portfolios and new would-be landlords from entering the PRS, many BTL investors would quite understandably like to see a reversal of changes to tax relief on buy-to-let mortgage interest.

A new survey of just over 200 private landlords, conducted by Paragon Mortgages, has found that most landlords would like to see the government, more than anything, reverse recent changes to income tax relief changes.

Scrapping the 3% stamp duty surcharge for second homes, which was introduced in April 2016, would also be warmly welcomed, according to respondents.

According to Paragon, among the most commonly reported actions taken by landlords in the second quarter of this year, was to increase rent (20% of landlords), sell property and buy no more (20%), or repay some, or all of the mortgage (18%).

This all comes as 88% of landlords, up from 71% six months ago, stated that they now understand the personal implications of the tax changes, initially introduced by the former chancellor George Osborne.

John Heron, managing director at Paragon Mortgages, said: “Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead.

“Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand it would appear that property yields are being maintained and that void periods are close to historic lows. This would suggest that despite the negativity around the market that the PRS continues to perform well.”

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    • 31 July 2017 19:00 PM

    We our instructed our managing agents to have all tenancies be charged 25% more once their renewals come up this year. ONLY to fund the new section 24 mega tax. I expect howls of protestation and anguish. and no doubt some void. But you cannot compress water. The madness of section 24 has commenced.

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    • 31 July 2017 19:02 PM

    "We have instructed.."

  • paul sharp

    Who does not want to make a profit from selling real estate? It’s not a question but a statement that is a rhetorical one as well. When Brexit is already a reality, the property market of UK has become unpredictable for investors, and so the selling trend is going to prevail. Property prices on the other side of world, in Australia, are going to be stable in the meanwhile. http://www.sellandstay.com.au

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