Advice is the key to combatting ongoing BTL challenges

The buy-to-let sector is an ever-evolving beast. It continues to create a variety of opportunities for landlords, although it is also one which will run into its fair share of obstacles along the way.

Some of the more historic challenges were outlined in a study by the London School of Economics (LSE) for the National Residential Landlords Association (NRLA) which showed that more than half (52%) of private landlords said tax changes in the rental market have had a negative impact on their investment plans. Changes which included restricting mortgage interest relief to the basic rate of income tax, a 3% stamp duty levy on the purchase of additional homes and a decision to cut Capital Gains Tax (CGT) to 18% for everything other than on gains from the sale of residential property.

A third of respondents said the reform to mortgage interest relief was having the greatest effect on the operation of their rental business. Of this group, 39% said the change meant that they were not proceeding with planned future purchases, while 31% had put plans on hold, and 28% were taking steps to leave the sector altogether. Meanwhile, 27% of landlords said that the stamp duty levy was most significant, followed by changes in the tax treatment of furniture and fittings (26%), and in the capital expenditure allowance (24%).

So how can landlords combat these challenges?

The advice process represents a very important piece in this puzzle. Even the most experienced landlords are now maximising the value attached to good, professional intermediary advice in what is becoming an increasingly complex, but highly competitive, lending environment. And the value of this advice is only likely to grow in 2022 as more lenders enter the marketplace and a range of innovative options emerge.

If you would like to speak to one of our specialist BTL consultants to see how we can help support your individual property and portfolio needs, then get in touch by calling 0800 170 1888.