Now the dust has settled, landlords across the UK have had the time to take stock of the effects of Section 24 of the Finance (No. 2) Act 2015 on their personal finances. As a quick recap, former Chancellor George Osborne’s decision to significantly restrict mortgage interest relief essentially categorises landlords differently to other business owners. Initiated in the 2017/18 tax year, those with properties in their personal names were initially able to offset 75% of their mortgage finance costs against gross rental revenues. From 2017/18, mortgage interest tax relief will be reduced by 25% increments up to 2020/21. After that point, all taxpayers will receive a tax reducer of 20% but will be restricted to the lower of: Total taxable income Property profits Mortgage interest cost For more information on the specifics, see some of Optimise Accountant’s comments … [Read More]
In a post-credit crunch borrowing environment, property investors and developers have grown accustomed to operating within a more professional marketplace. Although legitimate creative strategies remain, gone are the days of free-flowing speculative finance. From buy-to-let and bridging through to development funding and accessing finance via the ‘crowd’, this extended post aims to navigate investors through the main options. Please note that we are not mortgage brokers or financial advisors, and strongly suggest seeking suitably qualified professional advice. Buy-to-Let Mortgages Supporting a sector that has grown markedly since the mid-1990s, buy-to-let lending has shifted from being a niche commercial product to taking a significant share of the UK mortgage market. In recent years, however, Prudential Regulation Authority (PRA) stress-testing criteria has imposed stricter standards on a landlord’s ability to access finance. Formally introduced in 2017, the aim (according to the policy itself) … [Read More]
Although many landlords see rental guarantee insurance as cash down the drain, in an ever-complex operational environment it’s worth exploring some of the benefits of taking out a policy like this… In the second quarter of 2018, 324 landlord possession claims were issued and 250 landlord possession orders were made every day. Although this may be cause for concern, few would deny that the processes behind vetting tenants these days is better than ever. With more legally-watertight agreements alongside rigorous credit and employment referencing, landlords are more comfortable in the knowledge that their tenancies should run smoothly. What is Rental Guarantee Insurance and Why Take it Out? The premise behind Rental Guarantee Insurance (RGI) is that, if the tenants stop paying rent at any point, the landlord can make a claim. The insurance company will then take the appropriate action … [Read More]
The latest property investor factfile (“facts and stats”) aimed at buy-to-let investors and traders. We include the latest house price data / price changes, LIBOR / SWAP rate data, private rented sector growth, mortgage approvals and first-time buyer measures / price to earnings ratios. Also, check out the latest commentary by Ruban Selvanayagam.