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Guide to multiple buy-to-let

    Guide to multiple buy-to-let


    However, the political machinery at Westminster has been turning and throughout 2015, the chancellor has made several categoric changes to the tax treatment of buy-to-let investment.

    In November 2015, George Osborne announced a 3 per cent hike in stamp duty for buy-to-let properties and second homes, from April 2016.

    His summer Budget also removed the ability for buy-to-let landlords to offset interest costs on their mortgages against profits before calculating their tax bill.

    Moreover, the Scottish Parliament Finance Committee has also proposed a 3 per cent land and buildings transaction tax supplement on purchases of second properties.

    In addition to the government’s seeming crackdown on buy to let in an effort to boost the prospects of first-time buyers, regulators are also considering the potentially detrimental effect that a booming buy-to-let market could have on the overall economic health of the UK.

    Last December, HM Treasury launched a consultation to see whether the Bank of England’s Financial Policy Committee (FPC) should be given macroprudential powers to monitor and, if necessary, intervene in buy-to-let activity, should the FPC believe it was in danger of creating or compounding systemic risk in the housing market.

    The consultation, which closes on 11 March this year, asked: “Specifically the FPC recommended that it be granted powers of direction relating to tools in the buy-to-let residential mortgage market, by reference to loan-to-value ratios and interest-to-coverage ratios.”

    This guide aims to look at what the chancellor’s changes mean for landlords of multiple properties, how people can mitigate the effect of the various taxation changes, the pros and the cons of being a buy-to-let investor, and what advisers can do to help their clients navigate the ever-murkier waters of buy-to-let regulation.

    Supporting information supplied by: John Phillips, operations director at Just Mortgages; Phil Morris, head of distribution at Gale and Phillipson; Christine Newell, mortgages technical director for Paradigm Mortgage Services; Jeremy Duncombe, director of the Legal & General Mortgage Club; Bob Young, chief executive of Fleet Mortgages; Paul Clampin, chief lending officer for Landbay; and John Heron, managing director of Paragon Mortgages.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. When are the changes to the taxation of mortgage interest being phased in by?

    2. How many rented properties would someone have for HM Revenue and Customs to class them as a multiple buy-to-let landlord?

    3. According to the specialists surveyed for this guide, what are a lot of small buy-to-let investors seeking advice on constructing to mitigate the impending stamp duty charge?

    4. How much does Mr Gorham believe maintaining just one property could cost a year?

    5. By how much had the average house price risen, in percentage terms, between January 2014 and January 2016?

    6. Mr Duncombe states it is crucial that brokers do not do what?

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