"The package of measures that have been announced by banks, building societies and government in relation to people who have a mortgage are the right moves from both legislators and the private sector. The announcement from UK Finance and the Building Societies Association (BSA) will also extend the mortgage holiday to buy-to-let mortgages, which will be relief for those landlords that simply can’t afford to lose payments from their renters. This is a difficult time for all and the housing industry is pulling together to help people get through it with a roof over their head.
"Additionally it is very encouraging that banks have opted to suspend repossessions for three months. All the these measures should give homeowners, renters and landlords the breathing space they need to get through the pandemic.
"However, the government should also turn its eye to a variety of tax changes coming in April, which could add fuel to the fire particularly for one man band landlords who have already seen their ability to earn money massively curbed. The Residential Landlords Association and the National Landlords Association are calling for rules to be delayed in order to support landlords, with the final stage of the restriction on mortgage interest relief currently due to be implemented in April. These measures will make it significantly more difficult for one man band landlords and delaying this change would give them much needed breathing space and in turn reduce the impact on the tenants that occupy their properties.
"Many professional landlords will have taken advantage of setting up a limited company so they pay business taxes rather than suffer the tightened buy to let tax rules which have plagued individual landlords over the past few years. Under the package of measures announced yesterday landlords who have opted to create a limited company could be in a better place to manage a cashflow shortfall as small businesses will be offered government loans under their coronavirus emergency measures, but individual landlords will not get access to this cheap financing.
"Landlords will also find that from April they will be subject to changes to the rules around Capital Gains Tax (CGT) payable on the sale of a property. This will affect the CGT relief they can claim under private residence relief, although it seems unlikely many people will be expecting to sell during the current uncertainty so this should not be of immediate concern."