The imposition of the stamp duty surcharge on additional homes would add another £4,500 to the cost of setting up a buy to let property.
Kensington, a mortgage lender specialising in the buy to let sector, has reached that figure by using data on buy to let mortgages and property values from the Council of Mortgage Lenders.
The firm has also factored in changes to the Wear and Tear Allowance, now replaced by a system that only allows landlords to claim tax relief when replacing furnishings.
“As an industry, we are still digesting the contents of the Prudential Regulation Authority’s consultation paper about underwriting standards in Buy to Let. But it is important to remember that this marks the beginning of a raft of changes already introduced recently by the government and this has the potential to cause confusion even amongst the most savvy” according to Kensington spokesman Steve Griffiths.
“Moreover, given that some of the changes will be implemented over the course of a few years, keeping up with these developments can be difficult for landlords who may be juggling their day-to-day work with managing their Buy to Let properties” he says.
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