Written on 15 July 2015 by Alistair Boscawen in Property News
Chancellor George Osborne has received criticism for cutting tax relief for buy-to-let landlords.
The move was announced in last week’s Budget, when it was announced that the rate will slashed from 40 or 45% to 20% by April 2020.
There’s been a backlash from those working in the sector, and new research from professional service provider PwC showed that landlords will feel the pain when the Bank of England begins to increase the base rate – this is expected to happen in the second half of 2016.
The data showed that if rates reach 6%, landlords would incur losses of £780 on a property worth £100,000.
The government claims that the changes will only affect one in five landlords, but critics said that the policy could reduce the number of properties on the market, as landlords with multiple properties could be badly hit.
Economists at leading think tank, the Institute for Fiscal Studies (IFS) added that the change won’t solve the overarching supply problem, which makes it tough for young people to buy, in turn pushing up rents.
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