Investors discouraged by buy-to-let changes

Investors discouraged by buy-to-let changes

Around one in four of thoseconsidering a buy-to-let investment have been put off by the government’s plan to introduce a 3% additional stamp duty and cut tax relief, research fromonline investment platform has revealed.

The research shows that 9% of UK adults have given up on aspirations to own a buy-to-let property while 30% of are still considering whether to do so.

Around one in seven (14%) of existing landlords say they will now sell one or more of their properties because of the new rules.

Stuart Dyer,’s CIO, said: “The British have strong faith in property as an investment and many see it as a means of providing a pension income. But the government clearly has a policy to dis-incentivise BTL and the sharp increase in landlord mortgages revealed by the Bank of England credit survey will probably be a last rush before the gate slams shut.

“Having a BTL property can also mean an over-exposure to one asset class for many investors, who should strongly consider the alternative of investing in a diversified portfolio for the long term, especially if this can be achieved through a tax-free ISA wrapper.”

Under the changes the stamp duty on buying a £250,000 buy-to-let property will rise from £2,500 to £10,000 from April, while for a £400,000 property it will more than double from £10,000 to £22,000.

Also, from 2017, the tax relief currently allowed on finance costs such as interest payments on mortgages and loans to buy furnishings will be gradually reduced over four years.