January 2nd, 2018. Luke Egan
How Will 2017’s Changes Affect Buy-to-Let in the Year Ahead?
January has come and gone, and Christmas now feels like forever ago. It’s official, we’re now properly into 2018 and it’s time to look ahead and act proactively about happenings in the commercial finance and property sectors.
So, in order to look forward, we must look back at the major events of 2017 and how these will influence the industry in the months ahead.
What Were the Biggest Buy-to-Let Changes in 2017?
The buy-to-let sector saw a lot of changes in 2017. In April new mortgage interest tax reliefs were revealed alongside stamp duty land tax changes. Then in September new portfolio landlord application requirements were introduced. Lastly, The Autumn Budget saw more upset for property investors who have portfolios owned and managed by limited companies.
These changes were made not as an attack on buy-to-let investors, but as part of the UK government’s bid to help first time buyers get onto the property ladder and lesson the property crisis. Either way, despite the industry shake-up, there has been very little drop-off and the buy-to-let sector continues to thrive.
What Will Happen in 2018?
Could this be a delayed effect? Maybe. According to an article in NACFB magazine, some lenders are still adapting to the new deal origination process and the challenges it presents. The writer also suggests fewer applications will be accepted, and at lower average costs, than before. Whereas it states the higher stamp duty will make property investment more expensive and therefore could put off people entering the market.
Here at Pure Commercial Finance, we have only seen buy-to-let mortgage applications grow, especially outside the typical one or two-bedroom apartment in London mould. Investors are particularly keen on HMOs also – as predicted in our February 2017 post: Could Buy-to-Let Changes See HMOs Surge in Popularity?
However, there are further changes ahead, so this could change. In April, the second phase of tax relief removals on mortgage interest payments for higher-rate taxpayers will be introduced meaning just 50% of mortgage interest can be offset against profits.
Ahead of these changes, many investors have decided to set up limited companies, however this isn’t necessarily the solution. Find out if this could benefit you in our post: The Pros and Cons of Ltd Property Companies.
Brokering Buy-to-Let Mortgage Deals
If you decide that property investment is for you and the buy-to-let changes are manageable, we can help find you the finance you need to bring your plans to life. Learn more about our commercial mortgage services today.
Article By Luke Egan
January 2nd, 2018
Luke heads up our specialist property finance team where his focus is to drive our transactions valued between £100k and £5m.
Luke and his team manage enquiries from initial enquiry through to redemption. Luke also sits on the internal credit committee with Ben and Tom.
Luke joined Pure back in 2014 following a successful role in the Barclays property finance team that lasted over 8 years.See more articles by Luke