Tax change leaves its stamp on buy to let
BUY to let can be a complicated business, and something most potential landlords need straightforward facts about if they are to commit.
Victoria Bury, associate within the property team at SAS Daniels, comments regarding market behaviour and how things are shaping up as we head toward a new year. She said: “We have seen a recent slow-down in the buy to let market since April. However we are still seeing buy to let purchasers.”
“Due to the stamp duty changes in relation to investment properties, and also the proposed changes in mortgage tax relief, owning a buy to let property is not such a successful investment as it has been previously,” said Victoria. “However that’s not to say that there aren’t landlords who are still making a success of doing so. My advice would be to take legal advice and consult an accountant to understand the tax implications before deciding to purchase a buy to let property.”
And the implications for ‘accidental’ landlords?
“Unfortunately this happens quite frequently,” said Victoria. “What was the perfect home 10 years ago may be no longer feasible. A possible option is to rent out the original home and move to a more suitable place. It is important to take financial advice and if you decide to proceed to use a reputable letting agent to manage the letting. They will perform credit checks, ensure that the tenants deposit is held in a Government-approved deposit scheme, collect the rent and deal with any maintenance issues.”
Legal & General Mortgage Club director, Jeremy Duncombe comments on the current situation from an alternative angle. He said: “Over the past nine months, the Buy to Let market has undergone a number of significant regulatory and tax changes.
This layering of new regulation by the previous Government, combined with the impact of Britain’s decision to leave the EU, has made it a very busy year.
“While April’s Stamp Duty tax rise clearly left a mark on the market in the form of fluctuations in demand, both before and after its implementation, this tax change alone is not enough to make Buy to Let a significantly less attractive proposition.
“Even with changes to