The buy-to-let market has become increasingly difficult in recent years. To further deter investors, the government has implemented a number of changes to the tax system that primarily affect landlords. In 2016, an additional 3% stamp duty was imposed on purchases of second homes and buy-to-let properties. This increased the costs associated with buying a property to rent out.

Since 2017, landlords have been subject to changes in mortgage interest relief. The previous tax relief scheme enabled landlords to deduct the interest they pay on their mortgages before paying tax, resulting in 40% tax relief for higher-rate taxpayers. Now, landlords will receive a flat-rate tax credit based on 20% of their mortgage interest.

Additionally, landlords now have to declare the income used to pay the mortgage on their tax return, which could push some basic-rate taxpayers into the higher tax band and result in a larger tax bill.

Despite this, there are still many opportunities to be had in buy-to-let investments if they're approached with caution. Factors such as location, rental yield and tenant demand are all key considerations when deciding whether or not to invest in a buy-to-let property.

Ultimately, whether investing in a buy-to-let property is worth it depends on the individual investor’s circumstances and goals. Careful research and calculation of potential returns should be conducted before any major decisions are made. The decision to invest must also factor in the increased risks associated with the buy-to-let market. Taking all this into account could help landlords make an informed decision when it comes to investing in a buy-to-let property.

If you are interested in buying to let, we are here to help, contact us via email [email protected] or feel free to give us a call at 0151 662 0188