How Will Brexit Affect The Buy To Let Property Market?
Brexit has already had a significant effect on the Buy-to-Let (BTL) property market. The uncertainty has impacted both valuations & the overall enthusiasm of potential investors. George Osborne, before he was unceremoniously kicked out, had already decided to hammer the tax relief for landlords and effectively destroy the BTL retirement industry. Why he took it on himself to ruin the retirement prospect for landlords only he can say.
I believe that a positive outcome to Brexit will undoubtedly benefit existing BTL landlords and new purchasers coming into the market. Britain still has unbelievably low-interest rates, lenders have clearly come to embrace the new ethos of BTL property through a company without seriously impacting mortgage interest rates. Falling tax relief for landlords now becomes tax relief for corporates; given that you can offset all mortgage interest and relative costs against your rental income, landlords will be hugely more prosperous than previously – Stuff Osborne!
Bad News For BTL Landlords
However, that’s the good news – now for the bad news. Brexit has so undermined the confidence of the British public that the likelihood of a Conservative government being re-elected or frankly staying in power for a length of time, is historically deeply unlikely. Much as people may not like the idea of a Marxist fascist such as Corbyn or McDonnell running their country, even if there is a hung parliament, Labour would be arguing justifiably that their leader would become Prime Minister. And therein lies the serious problems for property landlords.
Everyone who reads the papers knows Labour has made it perfectly plain their intention to raise the top-rate tax. It’s certainly likely to go to 50-60% – I remember when it was 82% so don’t be alarmed, it’s highly likely to be 60%. In addition, both Corbyn and McDonnell have earmarked capital gains tax increase, probably being doubled to 56% for 2nd property owners. Stamp duty bad as it is right now is also likely to be vulnerable.
Brexit – What To Do Next As A BTL Landlord
There is a solution to this Armageddon. You haven’t got to be a member of Mensa to realise you need to act now!! Speak to those who know how to pre-empt this potential horror-show before it is too late. Do not put your head in the sand, do not think it will not happen – if Labour gets in I can guarantee most of this will happen. Speak to Gresham Street partners.