Last year was a testing one for landlords and 2017 is set to bring more challenges, but Karl Griggs writing for LandlordNews.co.uk in December 2016, is not pessimistic. He wrote:
“It is a time of upheaval for landlords, but whatever the changes in the buy-to-let landscape, the industry will pull together to weather them.”
In April 2016, stamp duty was raised to 3% for people buying properties in addition to their main home. Most landlords were affected by this change.
New regulations require landlords to raise the energy efficiency standards on many of their older properties, but there are government grants available to cover the cost of energy efficiency-related improvements.
In 2017, the tax relief available on commercial mortgage interest payments changed and a set rate of 20% was introduced. This affects landlords who are on a tax band higher than 20%, who previously could claim relief equal to their tax band.
On January 1, 2017, new buy to let underwriting rules were introduced requiring the rent on properties to cover up to 145% of the mortgage payments. These new affordability rules were designed to make sure landlords can afford mortgage repayments if the interest rate rises.
Though landlords are faced with extra costs, there are still plenty of commercial mortgage deals available at low interest rates for buy-to-let investors. Some landlords may not expand their property portfolios in 2017, but there is strong interest in buy-to-let property as a long-term investment.