Important news for Landlords

1. Mortgage interest tax relief cuts

Many of you will know that the level of mortgage interest tax relief that landlords can claim reduced further from April 6, with the amount investors can deduct from their rental income falling from 50% of their buy-to-let financing costs to just 25%.

The relief will end completely in April next year, when it will be replaced by a 20% tax credit for mortgage interest. The move will not only leave landlords facing high tax bills, but could also push some basic rate taxpayers into the higher rate band.

2. Energy efficiency upgrades

Around 200,000 landlords will have to upgrade the energy efficiency of their property this year. Landlords were previously exempt from meeting the minimum energy efficiency requirements if measures to improve a property would cost more than £2,500.

But the threshold has now been increased to £3,500, meaning fewer landlords will be exempt. The upgrades are expected to cost landlords an average of will be exempt.

3. New housing court

The Government is expected to unveil more details about its new Housing Court during the year. Under proposals previously announced, it would be a specialist court that provides a single route for dispute resolution and redress between landlords and tenants.

The move should make it simpler for landlords to navigate the legal system relating to tenancy disputes, while it could also make it easier for them to evict problem tenants. The Government is currently undertaking a call for evidence on the issue.

4. Competitive mortgage rates

While landlords have been subjected to tougher affordability checks in recent years, there is some good news on the mortgage front, with the cost of buy-to-let deals coming down.

The average cost of a five-year fixed rate mortgage for landlords fell to a record low in the final quarter of last year, according to financial information group Moneyfacts.

The group attributed the fall, which came despite a hike to the Bank of England base rate in August, to the high levels of competition in this sector of the mortgage market.

Source: Zoopla

If you need further advice on any of the above updated, get in touch with us.

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