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Broker role set to become more complex – MCI Solutions

by: Phil Whitehouse, managing director, MCI Mortgage Club
  • 14/12/2015
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Broker role set to become more complex – MCI Solutions
2015 has been a big year for buy to let but not necessarily for all the right reasons, writes Phil Whitehouse, managing director of MCI Mortgage Club.

While lending levels soared and new lenders brought competitive rates and further innovation to the market, Chancellor George Osborne’s announcement that landlord tax relief was set to be cut in 2017 shook the sector to its core.

The massive cut will mean buy to let becomes unprofitable for some landlords and no investors will put the effort into an investment if there is nothing to gain from it. Sadly this may mean the private rented sector suffers as good landlords decide to leave the market.

Those that stay will have to assess how they will manage the tax cuts. One way of doing so will be to set up a limited company in order to avoid income tax altogether and pay corporation tax instead (which will be cut to 18% by 2020).

While this may well offer a solution for investors it could cause a headache for brokers. It means the role of the broker will become more complex as circumstances become more complicated.

I am a big believer in utilising the help of experts and outsourcing when possible, and in this situation it makes sense to link up with a tax specialist to ensure your customers get the best holistic advice.

Sometimes, brokers in this industry are guilty of thinking they must be a Jack of all trades. However, we all know how the rest of that saying goes. Concentrate on being a master of your trade, focus on mortgages and lending solutions and enlist the help of an expert for areas that you’re not as clued up on.

Tax is a complicated subject and a good tax adviser will be able to help you understand how to structure the loans.

As well as allowing you to focus on the areas you know best, linking up with a tax adviser will also help you to offer advice that is a cut above the rest. You can stand out from the rest of the industry if you are able to offer safe, expert advice on a topic that a lot of investors will now be exploring.

Despite the tough year it has had, in terms of regulatory scrutiny and the Chancellor’s announcement, buy-to-let is still big business. And that is unlikely to change in 2016. Position yourself as the property investor’s best friend by ensuring the advice and help you offer is second to none.

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