According to HM Revenue & Customs’ (HMRC) policy paper, ‘Restricting Financial Cost Relief for Individual Landlords’ it’s not just mortgage interest to which the change in tax relief applies. As well as mortgage interest, finance costs include interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. The changes do also apply to mortgage arrangement, booking and valuation fees.
International real estate advisor Savills has reported that total transaction volumes in the UK retail warehouse investment market totalled £1.264 billion in the first half of 2015, marking a 28% increase on the £981.95 million transacted in the same period last year.
A major shake-up of the buy-to-let housing market could be about to take place, after the Chancellor announced plans to change mortgage tax relief for landlords. In his Summer Budget speech, the chancellor said that the relief will be cut to 20%, from 40-45%, in an effort to “level the playing field” between buy-to-let landlords and ordinary house buyers.
The Council of Mortgage Lenders’ (CML) latest figures for mortgage lending (May 2015) show that whilst lending levels recovered in May compared to April, they were down compared to a year ago. First-time buyers saw a decline in lending volumes, 13% down, compared to last year, but up slightly (3%) on the previous month, with total May loans estimated to be around £3.4 billion.
According to the Home Builders Federation (HBF), official statistics released in late May show that 40,340 new homes were started in England in Q1 of 2015, the highest quarterly number since 2007. The figures show that the momentum from 2014, which saw 137,310 new homes started, up 10% on 2013 and 60% on the trough in 2009, is gathering speed.
At the Council of Mortgage lenders Annual Conference in November 2014, Michael Rhodes, of the Leeds Building Society, in his address to the Conference, said:
“One of the biggest problems for anybody attempting to get on to the property ladder is funding the deposit – regardless of the lender they are looking to get a mortgage from. It can take a very long time to save up for a deposit, especially if the ‘bank of mum and dad’ are not able to fund the full amount at short notice in one lump sum.”