BUDGET 2015: Landlords will raise rents
Yesterday in the budget Chancellor George Osborne announced that the percentage of mortgage costs that landlords will be able to claim back will be cut from 45% to 20% in 2020.
Tan said he was disappointed with the decision, adding that landlords voted Conservative to prevent this very thing from happening.
Tan said: “Landlords may be forced to Increase rents to counter this move, this will diminish the savings of tenants which will make it harder for them to buy properties which is what the government are trying to do by “levelling the playing field”.
“It is likely that we may see a shift in owning properties via a limited company which will not only allow all of the tax to be deductible but will only attract a corporation tax rate of 18% by 2020.
“This greater demand for buy-to-let mortgages is likely to create opportunities for the large number of new lender entrants in this sector over the past year.
“This will create competition/choice and drive rates down to be comparable to be owning a BTL via a personal name.”
Tan added: “The irony is that many landlords/business voted blue and not red to stop this very thing from happening.”
Tan was lukewarm on the budget for failing to address housing supply.
He said: “What the budget failed to do is address the supply issue of housing which is ultimately what cause many of the issues the government is trying to address for first-time buyers.
“Landlords are resilient and when one door closes another opens.”