In recent months, inflationary pressures exacerbated by the September 2022 so called “mini-budget” caused havoc in the mortgage market. For a while experts predicted the Bank of England base rate would be at least 6% in 2023 but current predictions of a peak at 4.5% now look more likely.
Just very recently a major high street lender introduced a fixed 3.99% interest rate on a five-year mortgage, which is the first sub-4% product on the market since October.
Not exactly. Many landlords coming to the end of fixed rate mortgages in 2023 face significantly higher mortgage rates than before.
The gloom for landlords is not just limited to mortgage rates: landlords who hold property personally no longer receive full tax relief for mortgage interest unlike other businesses, and many landlords face significant bills bringing properties up to new Energy Performance standards by 2025.
Ignoring these issues is a dangerous approach. Our specialists recommend acting on these issues now, so what should you do?
Following a forecast of your profits and tax for the coming years, it may be the best course of action to:
Changing your business or transferring ownership of assets can trigger further tax charges and so these options should be considered carefully.
We advise that you seek guidance and expert advice from financial, tax and legal professionals on these matters.