Money Matters: Craig Poulter says: Love it or hate it, it’s happening

2015 saw the start of many significant changes in the buy to let market. George Osborne announced tax changes that would see dramatic adjustments in criteria for mortgaging let properties. This was followed in April of 2016 by increased stamp duty costs for anyone purchasing not only a buy to let property but also second homes. If you’re unsure how much difference these changes make here’s an example. If you are buying a property to be your primary residence at £250,000 the stamp duty liability is £2,500 but if this is to be let or a second home the cost quadruples to £10,000.

There is no doubt that we as a nation are obsessed by the housing market and I can say with confidence this a major contributing factor in the surging house prices in the last 5 years. Many will have no sympathy for the changes thrust upon the buy to let landlords. However, bear in mind without property investors how would the state cope with replacing the 5.4 million private rental homes estimated to be in the UK in 2015? Absolutely, the standard of let properties in the UK needs to be improved (even regulated).

2017 has seen and will see more changes to the criteria of buy to let mortgages. On the 30th September the second phase of the Prudential Regulation Authority report is implemented. If you’re reading this as a buy to let investor with four or more properties your life is again going to become more complicated. Now being considered a “portfolio” landlord will result in additional questions regarding your other let property as well as potentially larger rental income needed for newly acquired property.

We as a nation are obsessed by the housing market

There is no arguing with the fact that changes were required in the market to ensure no repeats of the 2008 collapse are possible. Many, however, feel that the changes designed to create a more level housing market without the huge peaks and troughs will have detrimental results for those renting. As costs for landlords increase you can bet your bottom dollar monthly rental costs will follow suit.

It’s fair to say the changes were made with first time buyers at the forefront of many decisions, some reported to be missing out on homes due to buy to let landlords being a more attractive buyer for those selling. First time buyers have benefited considerably since the changes were implemented, Halifax announced that 335,750 first timers got onto the housing ladder in 2016 up 7% on 2015. If nothing else this is extremely positive.

So, if you’re a landlord or a first time buyer and want to know how this affects your plans get in touch for a free initial chat.

Craig Poulter Certs CII (MP &ER)
www.venturemm.co.uk
01323 894532