EXPERT ADVICE PHILIPPA GEE, PHILIPPA GEE WEALTH MANAGEMENT

Ms Williams is going to be hit by the changes in what can be offset against rental income for the calculation of tax.

Fortunately, her mortgage payments are just under 29pc of the rental income for the buy-tolet property and therefore this will not have the impact that it might for others.

However, she needs to protect herself against this change, as she will have another £3,240 potential income on which she will be taxed each year. She could consider either increasing the rent, if possible, or selling if the value is attractive.

She has been clever to buy a property at a bargain price in an area where there is a strong catalyst for house prices rises. Now she needs to ask herself whether the value is close to a maximum level and whether she should look to move on.

A lot depends on where she chooses to locate herself. She said she was unsure whether she would remain in Swanage, where she owns her other property, or return to London in the longer term.

I would suggest that a decision on that needs to come sooner rather than later, so that if London is chosen as her base and she wants accommodation, she can press on with making the rental property her home. She would then need to decide what to do with the Dorset property.

The problem is that, while she thinks that the work she has done on the Swanage property since she bought it in November has given her a maximum gain of £40,000 after costs, every mortgage payment she makes will reduce this gain, particularly if the property doesn’t appreciate any more in value.

Overall she is relying heavily on the property market to provide for her future. This is a case of having all your eggs in one basket and is either an astute move or a highly dangerous one.