Home » Uncategorised »
66% of BTL mortgage applicants unaware of regulations
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
An alarming new report from Direct Line for Business shows that over half of new buy-to-let mortgage applicants are unaware of new and upcoming regulations.
Accidental landlords are least likely to be aware of any changes, according to the research.
Concern
66% of applicants were found to be unaware of either the alterations to Mortgage Tax Relief. This rose to 71% of accidental landlords. Mortgage advisors believe that these type of landlords account to 17% of new applications, with buy-to-let applications increasing by 29% during the course of the last year.
In addition, data from the report shows that just 7% of mortgage advisors believe that the Mortgage Credit Directive (MCD) will have a positive effect on the sector. This was in comparison to 59% who believe it will have a negative impact.
Alterations to mortgage tax relief are also set to be brought in from April 2017. As a result, landlords will no longer to be able to remove mortgage interest payments before working out their tax bill. Instead, they will receive a tax credit equivalent to 20% basic-rate tax on the amount. The changes in Stamp Duty from April 2016 are also set to test landlords and second-property owners.
66% of BTL mortgage applicants unaware of regulations
Changing
‘The new EU legislation on mortgages, coupled with the Government’s increase in buy-to-let taxation, could significantly alter the buy-to-let market,’ said Nick Breton, Head of Direct Line for Business. He said his firm, ‘would encourage any mortgage applicants to think carefully about the new law and how this could impact on them as a landlord.’[1]
‘With house prices in the UK rising by 7% in the year leading to October 2015 and with the estimated average deposit standing at more than £61,003, it is imperative that landlords are able to maintain a suitable amount of property to house the population of young people saving up to buy their first property, or those seeking a temporary stay in a town or city,’ he continued.[1]
[1] http://www.propertyreporter.co.uk/landlords/71-of-accidental-landlords-unaware-of-new-regulations.html
