Buy-to-let tax alterations could lead to ‘price correction’
By |Published On: 11th October 2016|

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Buy-to-let tax alterations could lead to ‘price correction’

By |Published On: 11th October 2016|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

UK residential property prices could be set to fall sharply as a result of the Government’s buy-to-let tax changes, according to the head of Landlord Mortgages.

Alterations to stamp duty, mortgage interest tax relief and mortgage application rules could make it trickier to make a profit from property investment. This in turn could put off landlords from choosing to purchase property and drive prices down as a result.

Bubble burst

Landlords are facing changes in how much they can claim in mortgage interest tax relief from early next year. This figure will be limited to 20%, eating into many landlords’ rental yields. Higher and additional rate taxpayers could well be deterred, making buy-to-let a less attractive proposition.

Lee Grandin of Landlord Mortgages believes that no one is able to foresee when the buy-to-let bubble will burst. However, he feels that the buy-to-let changes could well be a catalyst for, ‘major price correction.’

Buy-to-let tax alterations could lead to 'price correction'

Buy-to-let tax alterations could lead to ‘price correction’

Addressing the press, Grandin said: ‘If commentators are stating the property market is overvalued then the sudden supply of property post buy-to-let tax changes could well be the catalyst for a major price correction’[1]

‘It was never going to be politically acceptable or sustainable to have Tom, Dick and Harry own a buy-to-let portfolio. Take note: A price correction where the losers are Tom, Dick and Harry with a buy-to-let portfolio and the banks who supported them is a vote winner,’ he added.[1]



About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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