Christian Faes, chief executive of LendInvest, reveals his views on tax treatment for landlords and predictions for the coming year.
Next year, we could see some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new Buy-to-let stamp duty hikes take effect.
Inner London margins may narrow slightly, creating opportunities for house prices in other postcode areas, particularly those in the south of England, to better compete.
The Chancellor’s planned changes to mortgage interest tax relief and stamp duty for landlords will help to professionalise the buy-to-let market, for the benefit of tenants and aspiring homeowners.
Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market.
In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner-occupiers and first-time buyers drawn to densely populated urban area for work.
Across the country there is still no one place for market-leading yields and capital gains. 2016 could be the year of the “cross-country landlords” – professional landlords who live in one city and rent out houses in another.
We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise.