After a challenging year for the UK’s residential landlords, you might have read about improvements to the buy-to-let mortgage market in recent weeks.

In the three months to 31 May 2021, the average interest rates for residential landlords had declined. A two-year fixed-rate buy-to-let mortgage fell 0.10 percentage points to 2.95%, while a five-year fixed dropped 0.11 percentage points to 3.30%.

For higher loan-to-value (LTV) ratios, the drop was even more significant and as you would expect, it is vice versa for lower LTV. This may partly be down to increased competition.

By April 2021 there were 2,333 buy-to-let mortgage products on offer – more than at any point since the start of the pandemic. It all adds up to good news for investors seeking to expand their property portfolio or buy a second home, and this is further enhanced by the fact rental incomes grew 5.9% in April – the fastest growth since January 2015.

If these favourable borrowing conditions appeal to you and you are considering buying a holiday home or further rental properties, here’s a useful overview of the tax landscape and how you can best manage it.

Taxes have significantly shifted for landlords over the past five years and it’s not as attractive as it once was to borrow money to fund your purchase.

However, by talking to us you can make sure you are set up in the most efficient way to enjoy your rental income and any capital gains.


>> Download our Tax Planning for Residential Landlords Guide



The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.

Lambert Chapman Chartered Accountants

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