Budget 2018: Landlords could benefit from more generous BTL borrowing

  • 30/10/2018
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Budget 2018: Landlords could benefit from more generous BTL borrowing
Landlords may benefit from more generous borrowing calculations on some buy-to-let products following yesterday's Budget released by chancellor Philip Hammond.


Increases to the personal and higher rate income tax allowance margins could provide landlords with a welcome respite following tightening of borrowing regulations.

Some lenders apply less strenuous rates in their Income Calculation Ratio (ICR) assessments for non-taxpayers and basic rate taxpayers, chief executive at specialist buy-to-let broker Commercial Trust, Andrew Turner noted.

He said the rising limits 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.

Turner highlighted that there had been speculation beforehand that the chancellor might increase stamp duty on second homes, but in the event, these proved unfounded.

He added: “The most significant aspect of the Budget was the raising of personal income tax allowances to £12,500 for basic rate taxpayers and £50,000 for the 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.”

Commercial Trust noted that one lender which publicised its different rates was Coventry Building Society’s Godiva brand, although other lenders were also available.

However, the broker firm added that with the changes not due to be implemented until April, it could mean lenders amend their policies to accommodate the new windows before then.


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