Buy To Let Mortgages Liverpool

Three of the major recent changes that buy to let landlords need to know about.

If you are currently a buy to let landlord or you are thinking about becoming one here are three of the recent changes that you need to be aware of:

  1. Mortgage interest tax relief changes.

Since April 2017 the UK government have been phasing out tax relief on mortgage interest. The proportion you’re allowed to deduct is being reduced slowly each tax year and at the start of the 2020-21 tax year on April 6th – will come to a head.

Following the start of the new tax year, landlords will only be able to subtract a flat credit of 20% of mortgage related expenses from the rental income when filing a tax return.

  1. Letting fees ban.

From 2019 letting agents in England and Wales are no longer allowed to charge letting fees to tenants. Additionally in England, changes were made to cap deposits at a maximum equivalent of  five weeks’ rent, or six weeks’ where the annual rent is more than £50,000.

These changes are intended at stopping letting agents from taking advantage of those who may have no alternative than to rent from overcharging.

Landlords may now have to shoulder the costs associated with processes such as referencing and property inventory checks. Letting agent fees were already banned in Scotland ahead of England and Wales, and as of yet, Northern Ireland have not introduced an outright ban.

  1. Towards the end of 2019, ‘no fault’ evictions became a hot topic for discussion.

The government are considering repealing Section 21 of the Housing Act. The act allows landlords to terminate on-going tenancies (following the initial 6 months assured tenancy agreement) by giving just two months’ notice of termination to tenants without any need to provide a valid reason for doing so.

The government considers that by repealing Section 21 will provide tenants with greater security. However, landlords are concerned that the proposed changes may result in them having to resort to the courts to remove troublesome tenants in order they may repossess homes.

The National Landlords Association responded by suggesting that the proposals were ill thought out, and Section 21 should remain intact until or unless the rules for evicting troublesome tenants are satisfactorily reviewed.

True Cost Mortgages are experienced mortgage brokers in Liverpool and have been advising clients on buy to let mortgages for many years. Always ensure you take professional advice before making any purchase to ensure you are well informed on the rules surrounding buy to let mortgages.

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