Landlords ask govt to overturn tax changes and call for market 'stability'
The vast majority of landlords in the UK property market's private rental sector have called on the government to overturn tax changes that have started to come into play this year, as they asked for more stability in the market.
In April this year, the government started to phase in a new change to taxation which had been announced in 2015. Mortgage tax relief changes mean that higher earners are no longer able to take the interest on their buy-to-let mortgages into account when they are working out the taxable income from their rental properties.
This means that for many, operating in the private rented sector is now becoming more expensive. And according to a survey from Paragon Mortgages, the majority want to see the rules changed back. Of those it questioned, nine in ten said they understand the implications of the new laws, but that they would prefer them to be reversed.
It means this is the most popular act the landlords of the UK want to see the new British government taking, while second on the list was for no further changes to be made in the coming years. After a period where landlords have faced various spells of the government moving the goalposts, owners now say they want to see long-term stability in the sector.
"Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand it would appear that property yields are being maintained and that void periods are close to historic lows. This would suggest that despite the negativity around the market that the PRS continues to perform well," said John Heron, managing director of Paragon Mortgages.
Other things that landlords want to see the government doing in the future include making them exempt from capital gains tax and Stamp Duty if they have registered as a limited company, which 11 per cent say they have already done, to encourage more investment in the market.