Independent Financial Life Planners Bishop's Stortford: Budget boost for first-time buyers

Thursday, 23 July 2015

Budget boost for first-time buyers

Many financial experts including Enable’s IFAs in Bishop’s Stortford have been saying that the 45 per cent tax relief on interest payments has been putting landlords at an advantage in the property market against first-time buyers.

In George Osbourne’s Summer budget document, it says: 'The current tax system supports landlords over and above ordinary homeowners. Landlords can deduct costs they incur when calculating the tax they pay on their rental income. A large portion of those costs are interest payments on the mortgage. 'Mortgage Interest Relief was withdrawn from homeowners 15 years ago. However, landlords still receive the relief. 'The ability to deduct these costs puts investing in a rental property at an advantage.'

George Osborne has said he wants to support home ownership but 'act in a proportionate and gradual way. ''It is only fair that there is a more level playing field between first-time buyers and landlords.” This change will be phased in over a four-year period from April 2017. Currently, landlords can claim tax relief on monthly interest repayments - at the top level of tax they pay of 45 per cent. Mortgage interest relief is estimated to cost £6.3billion a year, a Freedom for Information request revealed recently.

Some experts worry that the move could also force landlords to raise rents to compensate for the change, which would be bad news for tenants. But it could be good news for first-time buyers who are competing with landlords on the property market where demand continues to outstrip supply.

Issued by: Enable Independent Financial Life Planners  25c North Street, Bishops Stortford, Herts CM23 2LD Telephone: 01279 755950 - Fax: 01279 657339  Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

At Enable Independent we know that our clients trust us and rely on our advice to help them to plan a better, more secure financial future. This is a responsibility that we take very seriously especially because we know that many clients have chosen us on the recommendation of friends and family. Each one of our advisers has deep expertise in their area of specialist knowledge and, as a team, we hold some of the highest qualifications available in the financial advice industry.

Our job satisfaction comes from using our skills to find workable, affordable and flexible solutions to meet our clients needs. Whether we are planning for known future funding requirements such as house purchase, school fees or income in retirement - or for the unforeseen such as job loss, long-term illness or early death, our independence from any product provider enables us to view the marketplace impartially. Our training permits us to look beyond a product's marketing hype and select on the basis of its fitness for purpose.