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Over 60% of landlords unaware of tax and MCD changes

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Written by: Moa Aarenstrup
05/02/2016
Some 62% of buy-to-let mortgage applicants are unaware of the changes to mortgage tax relief or the Mortgage Credit Directive (MCD), research shows.

Among accidental landlords, who rent out properties due to unforeseen circumstances such as being unable to sell, 71% of applicants were uninformed about the shifts in mortgage legislation, according to a survey among mortgage brokers by Direct Line for Business.

The MCD could impact their ability to secure a mortgage, as accidental landlords with one or two properties may not be able to pass the expected new affordability tests.

Some 49% of existing landlords looking to expand their portfolio were unaware of changes to either tax relief or consumer buy-to-let regulation, compared to 47% among new landlords aiming to create a portfolio, and 56% among new landlords looking for a single investment property.

In the Summer Budget, the Chancellor announced tax relief on mortgage interest rates for landlords will be cut from the current highest level of 45% to the 20% base rate.

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