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Posted on November 26th 2015 by admin-movingin

Landlords to make tenants pay for higher tax and interest rates

There is another warning today that changes to buy to let mortgage tax relief will lead to increased rents. 

Back in July, George Osborne announced that the government would reduce the amount of tax relief available to higher rate tax payers for interest on buy to let mortgages; now a survey of 4,480 landlords by the Deposit Protection Service shows 68.51 per cent saying the change would lead to increased rents.

Some 35.1 per cent say they are considering leaving the rental market or selling their property as a result of the move. 

On top of that any future interest rate rise is likely to have financial consequences for landlords with mortgages, and 32.79 per cent of respondents said that they intend to pass on the costs of any interest rate rises to tenants.

Almost two thirds of respondents also said that they would be worse off over changes to wear and tear tax relief. From next April an ‘automatic’ 10 per cent tax break for wear and tear at a property will be replaced with tax deductions covering the actual cost of replacing or repairing its contents. 

Just over a quarter of respondents said that they will redecorate or replace furnishings less often as a result of the various changes.