Budget has 'no real changes' for existing landlord says MD

Watch more of our videos on ShotsTV.com 
and on Freeview 262 or Freely 565
Visit Shots! now
Steven Bond MNAEA MARLA, Managing Director - Residential Lettings, Buy to Let Investments and Surveying - Beresfords Group.

“From an existing landlords’ perspective there were no real changes within the budget that will have a detrimental effect financially on the current properties which they may own.

Hide Ad
Hide Ad

"Speculation prior to Rachel Reeves budget speech in parliament indicated that she may increase CGT rates if and when second homes were sold. However, in reality there has been no change to the current thresholds concerning second homes so for the large majority of landlords this will be seen as a better outcome than what was first anticipated.

“There has been a change to Stamp Duty for those buying an investment property. Anyone currently purchasing a second home for investment purposes will now pay an extra 2% on the lowest threshold being £0 to £250,000. So, an increase from 3% to 5% would, in monetary terms, represent an additional £5,000 for a purchaser buying at £250,000 or above - slightly less for any such properties under £250,000.

Steven Bond, Beresfords GroupSteven Bond, Beresfords Group
Steven Bond, Beresfords Group

"Further concerns surround the timescale of when this increase becomes effective, which is almost immediately, so it will clearly hit those currently purchasing for this purpose or anyone looking to do so in the future. In these instances, it’s important that any additional charges in this regard should be factored into related financial forecasts.

Hide Ad
Hide Ad

“Granted this additional cost will not be welcomed by those affected, but it should be remembered that as and when such properties are sold at some point in the future, the current regulations allow landlords to offset such costs along with other specific expenditure, against any profits made before CGT is finally applied. So, in essence, there is a clear opportunity to reclaim some of these charges back from HMRC.

"Furthermore, bricks & mortar has and continues to offer lucrative financial returns to those prepared to invest over the medium to longer term, as average property prices and levels of rent received continue to increase.

"Therefore, the recent change to the entry level threshold of Stamp Duty for those buying is unlikely to be a significant deterrent for the large majority of investors who remain attracted by the healthy rental returns and capital growth potential on offer.”

x

Related topics: