Around 200,000 landlords plan to quit the market following George Osborne’s plans to increase taxes for buy-let-let properties, a survey by Kent Reliance suggests.
At the moment, landlords with buy-to-let mortgages can offset the interest on their monthly repayments against their income tax bills on the rent they receive. But George Osborne plans to limit this relief to those who fall into the basic rate of income tax from 2017.
“The worrying thing about the tax hike is that we could see buy-to-let investors continuing to invest after April, but increasing their tenants’ rent to offset their own increased costs,” says David Blake of Which? Mortgage Advisers. “I hope we don’t see this happen, because it would have the opposite impact that the government is trying to achieve with this tax hike by making it harder for first-time buyers to save for a deposit.”
The survey also mentions that the private rented sector has grown by 16% in a single year, making it worth around £1.2 trillion.
David adds: “We may see a surge in buy-to-let property purchases before the new tax hike, and I think it’s important that people looking to invest in the rental market understand their options as soon as they possibly can.”
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