First tax relief cuts; is buy-to-let property still at attractive proposition?

tax relief cuts

Landlords seem to be hitting the headlines a lot at the moment; first there were the buy-to-let tax relief cuts, and predictions about their impact on the UK rental market, and now landlords are going to be expected to take on more responsibility for migrant control under the Immigration Bill.

According to the BBC, landlords will soon be required to check a migrant’s status before agreeing a lease and evict migrants who lose the right to live in England. Those who repeatedly fail to carry out the checks or evict illegal immigrants could face up to five years in prison.

Under the new proposals, which come as the British and French governments struggle to cope with the daily migrant crisis in Calais, the Home Office would issue a notice to landlords when a tenant’s asylum application fails, stating that the tenant no longer has the right to rent the property.

According to the BBC’s legal correspondent, Clive Coleman, several things remain unclear in the Bill, however, including who will be responsible for paying to have the tenant evicted. Will bailiff costs mounting up to as much as £1,000 per eviction, landlords could be left with a hefty bill. Other commentators have also voiced concern that this move will lead to fear amongst landlords and discrimination against any prospective tenants with a foreign sounding name or unfamiliar identification documents.

Quick Move Now’s Business Manager, Danny Luke, commented:

The landscape landlords operate in is changing significantly. Although these checks seem perfectly sensible, and of course tie in with the checks employers are already required to carry out, they, and the eviction measures, will have significant financial implications, and as it stands it is unclear who will be responsible for those costs.

The purchase of a buy-to-let property has, in the past, been seen as a wise financial investment that can reap a healthy return, but these new measures, combined with the announced buy-to-let tax relief changes and expected interest rate rises, could result in landlords really feeling a squeeze financially. We’re already seeing an increase in the number of people looking to sell former buy-to-let properties, and it wouldn’t take much for smaller landlords to be priced out of the buy-to-let market altogether, which would obviously have major consequences for the UK housing market.

 

This content was written by Quick Move Now
Published on 4th August 2015
Last updated on 19th April 2017

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