First, we had the George Osbourne 2015 finance act phasing out tax relief on buy-to-let mortgages. Tax relief will be gone by next year as will many property owners and landlords as they start to pay more tax and even struggle to show a return on their investment. This is a travesty and goes against all principles of business lending.
The then Chancellor George Osbourne also removed wear and tear allowance, which will cost small landlords dearly.
If that wasn’t enough, the government are now proposing new rules to do away with Section 21 notices, which enables landlords to legally regain possession of their property without having to give a reason or find fault.
Many property owners have already sold up or reduced the size of their portfolio in order to cut borrowing. Property prices in many parts of the country have dropped for a number of reasons, including of course Brexit.
Some see this as an opportunity to buy more property as so-called amateur landlords run for the hills.
Others worry that long term open-ended tenancies may be the beginning of the end for the buy to let business as we know it. The banks will certainly be concerned about gaining possession of their security in the event of a default on the mortgage.
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