Writing in Landlord Today, Richard Rowntree Managing Director of Mortgages at Paragon Bank, comments on the impact of Section 24 on landlords now that it is fully implemented, and at the the time interest rates have risen.
The article can be seen here, and points out that Michael Gove (Department of Levelling Up Housing and Communities Secretary of State) and Clive Betts (Chair of the DLUHC Select Committee), both faced questions at the recent NRLA conference, over whether the Government should revisit the removal of Section 24 and the phasing out of mortgage interest relief to incentivise landlords to extend the supply of privately rented homes.
He discusses the difference between landlord structure, stating ‘Just under a third of landlords, 31 per cent hold a mix of limited company and personal name property, but the largest proportion, 34 per cent, hold all properties within personal name.
And it is those landlords who are facing the challenge of being taxed on rental income, rather than the profits of their lettings activity. During times of lower interest rates, this was less of an issue than it is today when mortgage rates have increased.’ also stating that they ‘recently surveyed over 1,000 landlords for our latest report, The rise of the limited company landlord. It showed that landlords who hold all their properties within a limited company structure, 23 per cent of the respondents, are generally newer and younger operators who have built their portfolios within a limited company from the off.’
Ending ‘ Reforming the tax treatment of landlord is not high on this Government’s agenda, so it’s unlikely that we can expect any change in this area soon.
However, it should be a focus for the next Government as part of a range of measures to ensure the private rented sector has the supply necessary to meet the nation’s rental needs.