The husband and wife team who built one of Britain’s biggest buy to let empires have just sold up for £250 million.
Fergus and Judith Wilson amassed 900 homes in a few years – but is it still possible to make a fortune from buy to let?
The dream of most landlords is to own and let out enough homes to give them a passive income that gives them a comfortable lifestyle and retire early.
But Chancellor George Osborne seems to have punctured that bubble with his tax raid on buy to let.
Tax changes on the way for landlords
Starting from April 2016 and phasing in by April 2019, landlords will see:
- Mortgage interest relief fritter away for higher rate tax payers
- A new way of calculating tax on rents based on turnover rather than profits
- Less relief for wear-and-tear on rented homes
- Digital accounts demanding landlords earning more than £10,000 a year present quarterly tax filings
- A stamp duty surcharge on investment properties of 3%
- Changes to travel expense claims
At the same time, the latest official rent figures from the Office of National Statistics shows average rents are:
- £625 a month in England
- £1,400 a month in London – the highest in the country
- £475 a month in the north-east – the lowest in the country
Landlords pay tax on profits they do not have
A similar report based on different research from landlord insurer Homelet revealed average London rents are £1,544 a month – up 7.5% compared with the same time last year.
Average rents for the UK excluding London were £743 a month – up 3.8% on a year earlier.
Wilson’s parting shot as one of Britain’s largest private landlords was to argue that he and his wife put their portfolio together when the buy to let industry was unregulated, but now the government has introduced a raft of new rules to manage landlord/tenant relationships.
“Landlords are an easy target for the government wanting to raise more taxes,” said Wilson. “The Chancellor said the new mortgage interest rules were to address unfairness in property taxation but many will now find they pay tax on profits they do not have.
“The tax changes hit small landlords as hard as they do large investors and will change the industry.”
