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Monthly Archives: July 2015

Tax Relief To Be Reduced For Some Landlords

If you are a landlord that has arranged a buy to let mortgage towards the purchase of an investment property that you are letting out then you should be aware that it was announced in the recent Budget by George Osborne, Chancellor of the Exchequer, that the tax relief currently available on mortgage interest is being reduced for those paying more than the basic rate of tax. At the present time, tax relief is available at the highest rate that you pay so some landlords could be obtaining up to 45% in tax relief on mortgage interest. Starting in April 2017, the tax relief is to be reduced over a four-year period to 20%. This would mean that someone currently paying 45% in income tax and paying £1,000 per annum in interest is presently getting relief of £450 per annum. By April 2021 this relief would only be worth £200 per annum. This is a significant reduction and may have implications for the property rentals market. For instance, it could lead to landlords increasing the rent that they charge their tenants to compensate for the shortfall in tax relief. It could also result in fewer people wishing to become landlords…

London Rental Income Increase Greater Than Rest Of UK

According to the HomeLet Rental Index for May 2015 the rent being charged by landlords on properties in London is increasing at a higher % than elsewhere in the UK. This is probably not going to come as a surprise to most people as it merely follows what tends to happen with property values in our capital city. The index reveals that new tenants in the three months to May 2015 taking up occupation of a property in London would pay an average of £1,472 pcm – that is an increase of 9.2% when compared with the three months to May 2014. In the rest of the UK, rents went up by 7.6% to an average of £738 pcm when comparing the same periods. It is interesting that the index also looks at the rise in income tenants received for the same period as this showed that, across the whole of the UK, incomes only went up by an average of 2.4%. When the average rent someone is paying in May 2015 is compared with what they were paying in May 2014 in the UK it was found to be 12.5% more – £960 pcm. Obviously, from the landlord’s point…

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