Before you say it, we acknowledge that Mortgage Strategy has become a bit fixated on the buy-to-let market of late but, given that this is an area that requires significant advice, coupled with the impact of the various tax changes taking place, it’s hardly surprising.
But while BTL lenders may be fearful that borrowing levels could take a hit, and mortgage advisers juggle tax advice restrictions with ensuring they are aware of the impact on clients, it’s landlords who are directly affected. They have already been hit with the rise in stamp duty applied earlier this year and still have to face the cut in tax relief on mortgage interest coming into place next year and the PRA’s stricter underwriting standards, which may impact their borrowing potential.
We all know that, for a long time, property investment was seen as a safe bet, but many landlords are beginning to question whether this is still the case. I was recently approached by a friend and asked if I felt there was any hope that Chancellor Philip Hammond would do a U-turn on, or at least ease, the tax changes introduced by George Osborne.
Of course I didn’t want to offer any form of false hope when I have no idea what will come out of the Autumn Statement, but I could tell that this friend, who owns three properties in London that are rented out, was genuinely concerned about the decline in her income. She doesn’t have a pension and is relying on rental yields to sustain her when she retires.
And what of the tenants, particularly those who are already struggling to make rental payments, when landlords pass on their extra expenses? It’s easy to become wrapped up in the headlines when it comes to tax changes but, at the end of the day, it’s people’s lives we’re talking about so it’s no surprise the market is making the news every day.
In more upbeat news, voting for the Mortgage Strategy Awards 2017 closed last week after a phenomenal amount of interest. You came in your droves and now there’s the small task of creating the longlist; it certainly won’t be an easy job. We’ll be in touch with everyone who has made the cut once this is done. Good luck to all!