What next for the buy-to-let market?
- By Bertie Russell
- 19 October 2018
The dinner-party landlord — the person who discusses their portfolio of rental properties at social events with like-minded individuals — is not yet an endangered species, but this type of investor remains under threat. Hit by successive tax changes, including the withdrawal of mortgage interest relief, amateur buy-to-let investors are leaving the business in droves.
Yet hundreds of thousands remain because they take a professional stance on their business, seeing it as a long-term commitment rather than an easy route to high returns, which was the case before the tax changes. Some are even adding to their portfolios.
Why are they staying? Although more first-time buyers are climbing on to the ladder, 5.5 million households still rely on the private-rented sector and housing policies are unlikely to alter this anytime soon. Renters still need landlords.
If you are wondering whether buy-to-let could still be a decent investment, or you are an existing landlord wondering whether to give up, we answer your questions.
How have the rules changed and will there be more moves in the budget?
There have been rumours of further action to limit buy-to-let in the budget on October 29, but nothing specific. It is unclear whether the chancellor shares the determination of his predecessor to cut the number of investors to free up properties for first-time buyers.
The measures taken by George Osborne included cuts to landlords’ mortgage interest tax relief, which began in April 2017 and are being phased in over a four-year period. By 2020 the relief will be given at the basic rate of tax only, meaning that some landlords with large borrowings will make losses.
Read the original article here.