Some buy-to-let lenders were pleased Chancellor Philip Hammond didn’t introduce any further buy-to-let taxation changes in his Autumn Budget.
Andrew Turner, chief executive at specialist buy to let broker Commercial Trust, felt the move to raise income tax thresholds could be good news for some buy-to-let borrowers.
He said: “Certainly there had been speculation beforehand that the Chancellor might increase stamp duty on second homes, but in the event, these proved unfounded.
“There was very little mention of landlords at all and perhaps the most significant aspect of this Budget, was the raising of personal income tax allowances to £12,500 for basic rate and £50,000 for higher rate, from April 2019.
“This could represent good news for some landlords, who are borderline higher rate tax payers at the present threshold of £46,351. If these landlords suddenly find themselves in the lower tax bracket from next April, they might benefit from more generous borrowing calculations on some buy-to-let products.
“This is because some lenders apply less strenuous rates in their income calculation ratio (ICR) assessments for non-tax payers and basic rate tax payers.
“This could result in some formerly higher rate tax payers being able to borrow more money on selected buy-to-let mortgage products, if they do drop out of the higher rate tax bracket into the basic rate.”
Toni Smith, chief operating officer, PRIMIS and Personal Touch Financial Services (PTFS), said: “It will undoubtedly be a relief for many landlords that the Chancellor has moved his focus away from the buy-to-let market in this Budget – a sector which is still getting its head around recent regulatory updates.
“This decision will hopefully afford landlords the time they need to take stock of their positions, and work to consolidate, or potentially grow, their portfolios.”
Similarly Peter Izard, business development manager at Investec, agreed and also welcomed Hammond cutting stamp duty for shared ownership properties valued at up to £500,000.
He said: “It was pleasing to see the Chancellor did not make any major changes to taxation in the buy-to-let sector or in stamp duty apart from the positive changes in shared ownership stamp duty.
“Investec considers the housing market requires a period of certainty and the lack of changes will be welcomed.
“The Chancellor announcements in the budget on the £500m increase to the housing infrastructure fund to support SMEhousebuilders are welcomed by Investec.
“The UK continues to suffer from a shortage of new housing to meet supply demands.”
