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Changes to mortgage interest tax relief plans unlikely
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Investors expecting a U-turn on mortgage interest tax relief changes to be included in the Autumn Statement are expected to be disappointed, according to an industry peer.
Talking at the Financial Services Expo in Coventry yesterday, David Whittaker of Mortgages for Business, braced landlords for disappointment.
Problems
Mr Whittaker said: ‘Hammond hasn’t got ownership of this problem, so doesn’t have to fix it. Once HMRC has a line of income coming in, if the Government gets rid of it, they’re going to ask how it’s going to be replaced. Tinkering with this would not be welcomed.’[1]
Continuing, Whittaker suggested that the buy-to-let sector was unlikely to see a surge in new lenders, should these potential changes be introduced.
He noted: ‘I think other potential new entrants will be sitting it out for a while. I certainly wouldn’t be looking to launch a lender into these unchartered waters.’[1]
Changes to mortgage interest tax relief plans unlikely
Relaxed
Whittaker also outlined his opinion that buy-to-let lending levels in general could relax in the next two years. Lenders getting to grips with the PRA’s requirements and the greater paperwork affecting portfolio landlords will become a burden for many.
‘In terms of gross lending I think we are looking at £40bn next year if we’re lucky; in 2018 we could then see a 10-15% drop,” he said. “I think the market will log-jam and lenders will take fright; some lenders don’t know where to start when it comes to collecting the paperwork required [by the new portfolio landlord rules,’ Whittaker noted.[1]
[1] http://www.propertyreporter.co.uk/finance/no-u-turn-likely-on-mortgage-interest-tax-relief-changes.html
