In his July 2015 budget, the Chancellor put buy-to-let investors in his crosshairs by scrapping a tax relief that allowed them to offset the interest on their monthly mortgage repayments, against their income tax bills, on the rent they receive. Then, in his November 2015 Spending Review, he went one step further by increasing stamp duty on purchases of additional residential properties – adding 3% on top of the standard rates.
For some investors, this has been one tax rise too many. The Residential Lettings Association (RLA) surveyed over 1,100 of its members and found that 10% now plan to exit the market and 33% will consider no longer investing in buy-to-let.
Surging house prices and rents have brought opportunity and returns for those with the capital available to buy property to rent. Nearly a fifth of the housing in England is now in the private rented sector and when you look at the returns on buy-to-let investments, fuelled by a national obsession with property, it is easy to see why.
Brooke Barnes, an associate executive in Palmers’ residential landlord and conveyancing team, said: “We will have to wait until spring to see how the Chancellor’s buy-to-let changes actually affect the buy-to-let sector.
“Most buy-to-let clients are sitting tight. The yields for most investors have become very marginal in the Thurrock area. What will be welcome news, for both first-time buyers and landlords who are keen to expand their residential portfolio, will be the new housing stock that is being constructed.
“Our professional conveyancing team are here to offer to you practical and clear advice on every aspect of property purchase, for advice and support please contact us.”