Buy-to-let Watch: Have you fully grasped the financial changes for landlords?


Not enough people – consumers or professionals – fully understand the Chancellor’s buy-to-let changes and their implications

I am often asked what the biggest challenge is for the buy-to-let market. This question has arisen not only as a result of the obvious hurdles presented by the Government over the past 12 months or so. There are always challenges in any market, regardless of whether or not the Government decides to meddle.

Indeed, over the years the issues facing our market have changed. From the struggle to get any players to lend during the credit crunch years, to the difficulty in meeting lenders’ demand for business now that the market is so buoyant, there have always been challenges.

So what is the biggest one facing brokers this year? The tax relief cuts? The stamp duty increases? Not quite.

You see, in my opinion these are challenges that can be overcome. At least they could be, were it not for one major issue: the distinct lack of knowledge among both consumers and industry professionals about just what, exactly, is going to happen. Not enough people fully understand the changes announced last year and the implications they will have. And therein lies the biggest challenge the industry is facing.

Perhaps there is apathy in pockets of the sector because of the lack of urgency. The cut in landlord tax relief will not be phased in until 2017 but that does not mean we do not need to think about it now. Everyone involved in buy-to-let, be it brokers, accountants or borrowers, should make it their business to fully understand the financial impact of the changes to landlord tax.

We cannot stop the Government making the decisions it wants to make on buy-to-let. We may not agree with those decisions and we may be waiting for that moment, almost certain to come, when the changes backfire and we can say a quiet “I told you so.” But we cannot stop them from happening.

What we can do is make sure we are fully equipped to deal with them and are ready and able to advise our clients with confidence and accuracy.

Make the effort to get up to speed now and educate yourself as much as possible on the impact of these changes. In doing so, you will set yourself apart from those contemporaries who are perhaps taking a wait-and-see approach. Your knowledge will be vital for your clients and your effort will pay off in the long run.


Ying Tan is managing director of Buy to Let Club