The most recent Property Investor Survey from Mortgages for Business shows that 60% of landlords believe upcoming changes to tax relief and mortgage affordability checks will impact them.
This survey was conducted during a two-week period in November and a total of 283 landlords responded.
60% of respondents felt they would be affected by the changes, while 29% felt that they would not. It is predicted that these landlords are likely to be a mixture of basic rate income tax payers and those that have incorporated their portfolios and are subject to corporation tax.
David Whittaker, CEO at Mortgages for Business, said: ‘The percentages feel about right for the market in general and it’s certainly been a tough 18 months or so for landlords, so it’s encouraging to learn that the majority are getting to grips with changes that will dramatically alter the way they operate.’
Somewhat alarmingly, 11% of landlords said that they were unsure if the changes would impact them directly.
These results marry closely with those from the Prudential Regulation Authority on buy-to-let lending. 60% of respondents to its survey said they understand the impact on borrowing, with 25% saying they partially understand.
6 in 10 landlords think they will be impacted by tax changes
From 1st January, buy-to-let lenders have been permitted to tighten affordability constraints in recognition of the larger tax burden on landlords. 9% of respondents to the PRA survey said that they were unsure how the affordability calculations would impact on their borrowing, while 6% said they were totally unaware of the new guidelines.
In addition, this survey revealed that many landlords are moving towards incorporation. 32% of those questioned said they owned at least a single property in a limited company. 54% said they would look to purchase through a limited company moving forwards.