Anyone who has the pleasure or displeasure of reading my blog posts on a regular basis will have surely picked up on the fact that I am never backwards at coming forwards when it comes to voicing my opinions, and this article is most certainly not going to break the mold.
I have watch over the past couple of years as the UK government slowly but surely eats away at the incentives for property investors to get involved with buy to let property investments and the ability to make decent returns.
Existing buy to let landlords must be sat at home thinking “what the hell” are the government playing at. In the middle of a housing shortage crisis they wish to punish those that have the ability to make a difference and help ordinary people find a place to live, all in the name of helping first time buyers.
This part really yanks my chain as there is simple no evidence to suggest these changes will help first time buyers one little bit, as house prices continue to rise wages are stagnant this is the real issue not landlords trying to make a little return on investment.
It is not enough that buy to let landlords have already paid tax on their hard earned money before they purchased the property, so the government has to find ways to squeeze a little more tax from them, taking away tax relief and hitting property investors with sky-high capital gains tax when they sell due to the fact there is just not enough profit in it anymore.
It really is a sad state of affairs when it comes to a situation likes due in no small part to the UK governments inability to produce more affordable housing like they have promised for the past few decades, so true to form someone else must pay for their mistakes.
To make matters worse the new buy-to-let lending rules come into play as of this weekend, tightening the noose around many property investors’ necks.
Any landlord with four or more buy-to-let properties is now seen as a “portfolio investor” these rules were introduced by the Prudential Regulation Authority, lenders will now take into account landlords’ total income versus borrowing across all properties.
To ensure that any further credit against new properties is not at the cost of being to repay loans on other properties within their portfolio.
Greg May, director of mortgage services at Romans in Hart Street, said: “The changes highlight the importance of keeping up-to-date detailed records for all of your properties.
“This should include: current mortgage value, rental income, outgoings and rental profits, along with tax returns for all properties you own. Your letting agent may have already compiled this information for you as part of their portfolio service.”
James Donigan, (right), director at Penny & Sinclair in Hart Street, said: “The changes in the mortgage market are targeted at buy-to-let landlords with portfolios of four or more properties”
“This is likely to restrict the number of mortgage products available and could result in some landlords disposing of the less profitable parts of their portfolios.
40 per cent of transactions in buy to let properties across the UK are estimated to be cash purchasers so many property investors do not require mortgages.
Adrian Moody, head of lettings at Savills in Bell Street, said: “Buy-to-let investors have recently been hit by a succession of tax policies, introduced in an attempt to level the playing field with first-time buyers.
“This could prompt many existing, or would-be, landlords to assume that now is not the time to invest — however, this is not necessarily the case. More discerning landlords should look towards areas where there is an active and established rental market and invest in low-cost properties. These low-value homes have a higher yield and will also give more borrowing ability.
So if like so many buy to let property investors you have “had it up to here” with all the rule changes and the constant new ways being found to make it harder and harder to make a living this could truly be the straw that broke the camels back.
If for you “enough is enough” and you want an alternative buy to let investment that can give you the same if not greater security, with the same if not larger returns then take haste and call DevDosh Ltd today.
Let us take the time to tell you all about our UK based, asset-backed, fixed income (10 per cent annually) investment product that requires you to do nothing but sit back and relax and collect your profits, and tell the government where to stick their buy to let lending criteria changes.
Call us today on tel: +44 (0) 20 7193 7797 or visit us at www.devdosh.com for further information.