The life of the buy to let Landlord continues to become more complicated and expensive. In fact, the humble private buy-to-let Landlord might be forgiven for starting to think he’s under attack. Primarily because, in large part, he is!
The most recent of these measures was announced last year with little fanfare but it’s quite possible that it will have a considerable effect on the market.
The new requirements will mean that landlords with more than one property in their portfolio must now provide details on all of the properties in their portfolio even when they are only mortgaging a single property. The shear administrative time (and therefore, cost) likely to be incurred by lenders (and therefore passed on to Landlords) could be significant. In fact, there is even talk of the lending market for the buy-to-let sector contracting, with some lenders either increasing fees or withdrawing from the market entirely.
These changes, announced in 2016, come into effect this year and come hot on the heels of a barrage of rule changes affecting how Landlords structure their investments.
From April 2017 landlords who own buy-to-lets in their own name have seen tax relief on mortgage interest tapered back from a maximum of 45 per cent and replaced with a flat 20 per cent tax credit by 2020. This, combined with the removal of the wear and tear allowance and the introduction of a 3 per cent stamp duty (SDLT) surcharge for buy-to-letters will, no doubt, have an affect on the sector and the market in general.
The new mortgage rules, part of set of measures laid out in September by the PRA which also toughened up rental income requirements, applies both to landlords who own properties in their own names and to landlords who own through a limited company.
If you have a portfolio of buy-to-let properties and you’re looking to buy more, or remortgage, it is important that you take proper advice sooner rather than later.