Tax Changes and Brexit Could Devastate Buy-To-Let Market
According to the chairman of the Conveyancing Association, the effects of the recent Brexit result – along with the government’s decision to introduce new anti-landlord tax policies – could easily produce some seriously negative consequences in the Buy-To-Let marketplace.
Of course, the full effects of the Brexit result remain to be seen but the government’s decision to clamp down on tax relief for buy-to-let mortgages whilst introducing a 3% rise in stamp duty tax has already convinced a number of landlords to turn their backs on new property investments.
In terms of the figures, a recent report by the Council of Mortgage Lenders has shown that the amount of money borrowed by landlords had fallen by over a fifth when looking at the year-on-year results for July.
When asked about the current situation, the Conveyancing Association chairman – Eddie Goldsmith – had the following to say:
“I think many would agree that it’s been rather more than a traditional, seasonal drop off over the summer – the impact of the stamp duty changes for additional properties has been sizeable and we’ve seen considerable falls in buy-to-let purchase activity, although remortgaging has improved”
Although much of the damage has already been done, Goldsmith concluded that although the chances were slim, the housing market could be easily be brought back to life if the government decided to reverse these new buy-to-let tax policies in the Autumn.
All Is Not Doom and Gloom
On a more positive note, the CEO of www.reallymoving.com – the highly successful conveyancing comparison website – had the following to say:
“The impact of Brexit on the UK conveyancing market was quite dramatic in the short term, but it now appears to be back to normal.”
He additionally stated that although the average number of transactions had fallen by ten percent on a national level, and by almost thirty percent in London – prices now seem to have stabilised.
Light at the End of the Tunnel
So what can be done if we want to see an improvement in the number of landlords investing in buy-to-let properties?
Eddie Goldsmith says that a white paper is soon to be published which will detail new ways of tempting landlords back into the market. By encouraging lenders to cut back on the amount of red tape that borrowers face – whilst reducing the number of queries involved with each transaction – the cost and delay associated with borrowing could be reduced significantly.