The calculator was updated in response to the Chancellor’s Autumn Statement announcement that purchases of buy to let and second homes would incur a surcharge of three percentage points.
Steve Olejnik, sales director at Mortgages for Business said: “The calculator will demonstrate how much landlords could save if they act now to get purchases completed before 1st April. This is particularly important for those who are considering transferring their properties from individual ownership to a corporate vehicle. It’s going to be an expensive exercise anyway – there’s no point in making it worse.”
In the Summer Budget, Mr Osborne proposed to limit mortgage interest relief to 20% for higher tax rate paying individual landlords. This has prompted many to make purchases and move their portfolios into SPVs because they are not affected by the relief cap.
Mr Olejnik continued: “There are only eight or nine buy to let lenders offering products to limited companies and as such, they are likely to be swamped in the run up to the deadline. Bearing in mind that the average processing time on a buy to let mortgage from application to completion is 6-8 weeks when things run smoothly, landlords need to act NOW to ensure that they don’t get held up in processing queues brought on by increased demand.”
The stamp duty surcharge is expected to deter some would-be landlords from entering the market but the established, professional landlords, who are in it for the long term are likely to continue to grow portfolios and factor in the increased costs. The new calculator will help them to plan their onward strategy.