Curbing the Buy To Let surge?

With the changes to pension provisions allowing more flexibility with investment the Buy to Let market has seen a huge increase of interest in the last few months. Within the Budget the Chancellor announced measures which attempt to curb the surge in this sector.
At present buy to let Landlords can offset their mortgage interest payments against their income. The benefit of higher rate relief is to be capped to the basic rate of income tax, which currently stands at 20pc. The reduction is to be made between 2017 and 2020 and the Governments predictions are that it will raise £665 million a year by 2020/2021.
Although likely to be unpopular with Landlords this clearly shows an intention to address the booming buy-to-let market.

The measure itself does not stop the demand for rental properties, but reaction in the sector to the measures indicate a concern that this could increase rents if Landlords choose to leave the market, and it may detract would-be Landlords for entering and those who would have benefitted from the higher rate. There are also measures in relation to ‘wear and tear’ tax relief allowances which decrease the relief’s current seen by Landlords.
For more information on Buy to Let contact Associate, Jo Morgan on 01726 874700 or email jo.morgan@coodes.co.uk