Here at Luscombe & Co. we’re always on the look out for ways that we can help you, our landlords, to stay informed and provide you with an insight into what the ever changing landscape of politics and legislation means to you.
As I’m sure you’re all aware by now, George Osborne has released the first purely conservative national budget in 18 years.
The fallout from the release of the national budget could prompt the most significant changes in the private rental sector since the Welsh Housing Act of earlier this year. With the government set to steadily reduce the amount of tax breaks afforded to landlords until it is finally brought down to the same level as income tax (20%) in 2017, we could see a lot of people stepping out of the buy-to-let market. The decision to reduce the level of tax breaks for private landlords seems a little odd given that the government have recently made the decision to allow people early access to their pensions, with the vision that many people would take advantage of this by investing in property and helping to soften the housing crisis. The reasoning behind this most recent change was to address “unfairnesses in property taxation.” Basically, the government has decided that home owners and landlords should be treated equally when it comes to taxation despite the fact that landlords are contributing towards adding more properties to the private rental market.
Another issue that this may cause for landlords in the buy-to-let market is that it could flood the market with scores of buy-to-let properties which landlords are being forced to sell due to the lack of affordability thanks to the new budget. What this means for anyone looking to sell or get out of the buy-to-let market altogether, is that house prices will be driven down due to the greater availability of properties.
To finish on a positive, the good news for those of you looking to rent out fully furnished rooms is that the budget provides for an increase in tax free income from the current £4,000 up to £7,500!
If you’ve got any questions about what the budget means for you and your property specifically, please don’t hesitate to get in touch with us by email at [email protected] or by phone on the number below. Better yet, pop in and see us for a cup of tea and a chat at our offices on Bridge Street!