Steve Bolton, Founder of Platinum Property Partners, comments on CML mortgage lending data (August 2016):

CML

 

“Five months after the introduction of stamp duty changes for landlords, buy-to-let (BTL) mortgage lending remained subdued, with the number and value of loans down by more than 10% year-on-year. With tougher affordability checks being introduced for BTL borrowers, we can expect the number of loans to fall further in 2017.

“The stamp duty surcharge is just one in a series of recent changes implemented by the Government designed to penalise landlords and derail the BTL market. Section 24 (the Tenant Tax) will restrict landlords’ ability to deduct mortgage interest costs as a business expense and as a result force many to exit the market or increase rents, when many haven’t done so for years, as their growing tax bill will wipe out any profits. Wealthy, institutional landlords who can purchase properties without the need for mortgage finance will not be affected, creating an unfair playing field and leaving smaller landlord’s financial plans in ruins.

“The Government’s belief that BTL tax changes will help residential buyers is hopelessly misguided. Tenants will undoubtedly be hit with higher rents as landlords struggle to stay afloat, making it even harder for them to save for a deposit. We have already seen evidence of this in Ireland, where a similar tax change resulted in a 50% increase in rents over a three-year period.

“Although our legal battle to reverse this legislation has now run its course, we are continuing to fight this legislation through lobbying, and will continue to do so until this ludicrous legislation is abolished or the retrospective nature of the tax changes is removed. As the judge said himself, the Tenant Tax raises serious questions socially, politically and economically.”

 

Steve Bolton is co-leading the Axe the Tenant Tax coalition – a crowd-funded coalition of individuals and organisations who represent more than 150,000 landlords, who in turn provide privately rented accommodation to more than one million tenants. Their aim is to attempt to abolish Section 24 of the Finance (No.2) Act 2015 by putting significant political pressure on MPs and Government. To find our more or donate to this cause, please visit www.tenanttax.co.uk.

 

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