As you’ve probably already heard, the government has clamped down on tax relief on mortgage interest payments for landlords in the latest budget. At the moment wealthy landlords can claim relief of up to 45%, but from April 2017, the limit will gradually come down to 20%. Predictably, it’s caused some strong reactions from experts in property and finance.
If you’re a B2L landlord – or considering a move into property investment – it’s worth reading our summary of opinions and figures we’ve gathered together from recent reports:
- The National Landlords Association claims the change will shift the burden to tenants through an increase in rents.
- Millionaire landlord, Fergus Wilson, offers his thoughts on how this will not solve the housing crisis.
- New PwC research shows that the impact of tax relief reduction will be compounded by the eventual rise in the Bank of England base rate.
- Deloitte has also pitched in, telling The Telegraph:
“This will hit those people who sank their money into property because they were getting no interest on their savings in the bank, or following the financial crisis, no longer trust the pension model, and are relying on rental income.” – Phil Nicklin, a tax partner at Deloitte.
- The cuts have been labelled as “plain wrong” by the Institute of Fiscal Studies.
- The Guardian has gathered new estimated figures from Nationwide of typical landlord income and how it could be affected.
- Housing and homelessness charity, Shelter, supports Osborne’s move, agreeing that it will release more housing for first-time buyers.
Although we’re not tax specialists, with 15% of mortgages taken out this year being for B2L purposes, we know this change is going to concern a lot of people.
What we can do is help you find the right mortgage – with changes on their way, your choice is vital. Call me on 07739 189277 or contact one of our other mortgage experts.
