Is it time to reassess your buy to let mortgage?

Wednesday, 5th August, 2015

There has been a great deal written about buy to let since the recent budget announcement, leaving many unclear as to what changes will be taking place and over what timescale.

The first thing to point out is that none of the changes announced by the Chancellor will be happening imminently. Instead, they will be introduced over a four-year period from April 2017. So, if you have a buy to let property there is plenty of time for you to consider your options.

At present, anyone buying a buy to let property can deduct a range of expenses from their rental income, including any buy to let mortgage interest. However under the new rules the amount landlords will be able to claim will be capped at the basic rate of 20%. This will particularly affect higher-rate taxpayers who are currently able to claim as much as 45% tax relief on their mortgage interest.

The changes will be phased in as follows:

2017-18

The tax deduction from property income will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction.

2018-19

The finance costs deduction will amount to 50% with the remaining 50% given as a basic rate tax reduction.

2019-20

The split will amount to a 25% finance costs deduction and 75% given as a basic rate tax reduction.

2020-21

All financing costs incurred by a landlord will be given as a basic rate tax reduction.

Another area that will change relates to the ‘wear and tear allowance,’ which allows landlords who let out furnished properties to reduce the tax they pay by offsetting 10% of rent charged as an expense. Landlords are currently able to do this regardless of whether any actual improvements to the property have been made however under the new rules to be introduced from April 2016, landlords will only be able to get tax relief on costs they actually incur.

Whilst we’re advising landlords and prospective landlords not to worry, we do suggest that those with buy-to-let mortgages who are concerned about how these changes will affect them to seek mortgage advice as there are number of ways in which to mitigate any potential negative tax implications.

Remortgaging represents a viable solution to offset any shortfalls left as a result of the tax changes. And, as a mortgage broker with comprehensive access to a wide range of mortgage products, Complete Mortgages will make sure you have access to the best mortgage deals and the best mortgage advice.

Whether you’re considering remortgaging your buy to let mortgage or about to become a landlord for the first time, get in touch to find out how we can help on 01483 238280 or email info@complete-mortgages.co.uk.


Have you considered becoming a landlord?

Thursday, 27th June, 2013

Despite a turbulent economic climate, the buy to let market has been going from strength to strength. With the average first time buyer now being 37 years old*, there has been an increase in demand for the rental sector, so now may be a great time to invest in property.

The latest Paragon survey shows the highest level of buy to let mortgages per quarter since the financial crisis began.  With first time buyers finding it difficult to raise the deposits required to get on the property ladder, alongside improved mortgage products from lenders, landlords have increased confidence in the buy to let market and have seen significant growth.

Lenders have recognised this area as a growing market and there are a large number of competitive mortgage products to help investors take advantage of this opportunity and become a first time landlord.

As with any investment, purchasing properties to let does carry risks but by seeking financial advice you can discuss all aspects of the buy to let market so you can feel secure in your decision.

Why not speak to us here and we can take you through all your options and help find the right buy to let mortgage for you. We are able to provide a full advice service and guide you through the whole process. There are many things to take into consideration when taking out a mortgage such as general insurance and protection; thankfully we all offer a full service in insurance so why not contact us today?

Thinking of becoming a landlord? Get in touch today on 01483 238280.

Your property may be repossessed if you do not keep up repayments on your mortgage.

*Source: Money Supermarket