The Council of Mortgage Lenders reported in May that £1.2 billion had been advanced for buy-to-let purchase, representing a 20% increase on the May 2014 figure.

Britain’s rising band of buy-to-let landlords were left with plenty to consider after the Summer Budget introduced changes reducing the amount of tax relief available on interest payable on buy-to-let mortgages.

In a move the Chancellor labelled as one that would “level the playing field for homebuyers and investors” landlords will find the amount of tax relief they are able to claim restricted to the basic rate by 2020, with the changes phased in gradually from April 2017.

Those used to claiming tax relief worth 40% or 45% will find this restricted to 20% once the changes are fully implemented. In addition, from April 2017 the 10% wear-and tear allowance will go and landlords will only be able to deduct costs they actually incur.


Some commentators have suggested that the new tax rules for buy to let could force landlords to raise rents to compensate for their lost tax relief. Others think the move may lead them to review their investment strategy and sell their properties.

However, those who are basic-rate tax payers will see no change, and many may still view their likely returns as preferable to the low rates currently available on some savings products.

Landlords who invest in buy-to-let through limited companies will avoid this new personal tax increase, making this a potential solution for some investors. On the other side of the coin, first-time buyers may find it easier to get onto the housing ladder if there are fewer landlords competing with them for the same entry-level properties.

Credit rating agency Moodys, has suggested that curbing mortgage interest relief for buy-to-let landlords will reduce lending in the sector and could slow house price growth.

If you’re a landlord and still have questions about tax for buy to let properties please do contact us. We offer landlord financial advice, mortgage advice, pension advice and much more. Clifford Osborne are IFA’s based in Eastbourne, East Sussex, nearby to Bexhill, Hastings, Newhaven, Uckfield, Seaford, Lewes and Crowborough.