Landlords are getting a double whammy according to Kate Faulkner

katefaulkner

 

There was an interesting interview on BBC Breakfast this morning with Kate Faulkner about rental property shortage, Section 24 and other tax restrictions.

2 million extra households will be needed by those looking to rent by 2025 and according to RICS a lot of rental properties are owned by private landlords who have 1 or 2 extra houses.  There is currently not enough supply for the demand.

The interview discusses the extra 3% stamp duty introduced in April 2016 and the fact that this morning Estate Agents are reporting a 60% drop in buy to let sales since the introduction of this extra tax.

Kate Faulkner discussed how landlords are being beaten up – they’re seen as greedy landlords, but they’re actually just delivering a service. 

As well as the stamp duty, there is a general increase in taxes.  A landlord can currently deduct the mortgage interest off the rent. From next year you won’t be able to deduct this from your rental income in your accounts, therefore the profit you make is artificially higher therefore your taxes will go up. That will push some landlords into cashflow negative territory,  in truth, this is no good for tenants and no good for landlords.

Kate discusses how there are currently 145 – 160 rules and regulations that you have to abide by to rent out a property.

As a landlord you are getting a double whammy with the extra taxes, the extra beaurocracy and the capital growth isn’t necessarily there at the moment. 

 

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