More experienced landlords hold a better understanding of the implications of the Government’s changes to mortgage tax relief, according to new research.
Paragon Mortgage found that despite the changes having come into effect, many landlords still fail to understand them. The research found that 78 per cent of landlords claim to understand the personal implications, marking significant growth from the 8 per cent in the previous report, with experienced landlords more clued in.
However, despite the changes being announced in 2015, giving landlords time to consolidate their understanding, even with research many remained confused. There was in fact a small growth of those who did not understand the impact, rising from 7 per cent to 11 per cent. Furthermore, 18 per cent claimed to need more information, up from 7 per cent previously. The latter figure was attributed to landlords only recently attempting to comprehend the tax changes following an influx in publicity in the run up to them coming into effect.
In spite of the changes, landlord optimism was stable in the first quarter of 2017. The average rating of prospects for the private rented sector over the next year stood at 6.7, continuing an upward trend started in the first quarter of 2016.
Paragon Mortgages managing director John Heron said: ‘It’s encouraging to see that the sector has not been negatively impacted to the degree that had been widely predicted, despite some turbulence over the last couple of years. This increase in understanding combined with effective financial planning may be the key drivers behind a steadier picture in terms of overall optimism amongst landlords. However, we remain cautious, as landlords will not be fully impacted for some years yet and, whilst we have been able to track a modest recovery in confidence since 2015, the sector is still some way off its peak. The private rented sector is finely balanced and will remain so for some time.’