A landlord with a BTL interest only mortgage may be on a rate of ~2% today which in 18 months comes to term and they will need to remortgage on a rate of e.g ~4%. Their repayment will essentially double (that’s a simplification but fine for the example). They will also likely be required to show that the income of the property meets a certain % threshold of the repayment. They will therefore need to increase the rent. The tenent won’t be able to afford it, and it’s likely others won’t either. If you can’t afford to buy a house, you’re not going to be able to go from £1500 a month to £3k.
The landlord won’t be able to remortgage so they will have to sell. When this hits the BTL market, we will have an increase in properties needing to be sold which will reduce prices and for some, a loss for the landlord or lender.
The government needs to do something that will help first time buyers (owner occupiers) get a mortgage reducing the current dependancy on landlords, and banks need to do more to avoid the scenario I lay out here (reduce IO, reduce the number of properties someone can own via BTL etc).
Stamp duty is an obvious one. I’ve paid tax on my income, why should I pay tax to buy my first home. Or even my 2nd home (I don’t mean having a 2nd home I mean the 2nd house I move to and live in as my sole property). Also, with property prices always rising (I realise that prices decrease as well but over time they will always be higher) stamp duty increases. In fact, I think the current plan is to reduce the thresholds in 2025 so this will make things even worse.
Get rid of stamp duty below properties of e.g £5m.
Not sure how they would manage this.
A landlord with a BTL interest only mortgage may be on a rate of ~2% today which in 18 months comes to term and they will need to remortgage on a rate of e.g ~4%. Their repayment will essentially double (that’s a simplification but fine for the example). They will also likely be required to show that the income of the property meets a certain % threshold of the repayment. They will therefore need to increase the rent. The tenent won’t be able to afford it, and it’s likely others won’t either. If you can’t afford to buy a house, you’re not going to be able to go from £1500 a month to £3k.
The landlord won’t be able to remortgage so they will have to sell. When this hits the BTL market, we will have an increase in properties needing to be sold which will reduce prices and for some, a loss for the landlord or lender.
The government needs to do something that will help first time buyers (owner occupiers) get a mortgage reducing the current dependancy on landlords, and banks need to do more to avoid the scenario I lay out here (reduce IO, reduce the number of properties someone can own via BTL etc).
Stamp duty is an obvious one. I’ve paid tax on my income, why should I pay tax to buy my first home. Or even my 2nd home (I don’t mean having a 2nd home I mean the 2nd house I move to and live in as my sole property). Also, with property prices always rising (I realise that prices decrease as well but over time they will always be higher) stamp duty increases. In fact, I think the current plan is to reduce the thresholds in 2025 so this will make things even worse.
Get rid of stamp duty below properties of e.g £5m.