Action taken to level mortgage playing field

CHANCELLOR George Osborne announced in the Budget that he is taking action to ensure that in-built advantages for buy-to let landlords over those who buy homes for their own use are negated.
Mortgage interest payments can be offset against income for buy-to-let landlords, an unfair advantage over people buying homes to live in, he said.
This system has fuelled buy-to-let mortgages, which are now 15% of the market.
Mortgage interest relief will be restricted to the basic rate of interest, the Chancellor said.
He also announced that room rental tax relief – which he described as a good scheme – will be raised to £7,500.
The organisation SpareRoom has campaigned since 2009 to get the current threshold raised. Its director Matt Hutchinson said: “The Chancellor’s change to the Rent A Room scheme has potentially huge implications for the scarce supply of affordable rented accommodation.
“In the midst of a housing crisis, and with building levels behind all forecasted targets, it’s vital we make better use of existing stock and this will do just that.
As expected the Chancellor confirmed pre-Budget rumours that he would increase the inheritance tax allowance.
From 2017, the Government will phase in a new £175,000 allowance which will sit on top of the existing £325,000 threshold, fixed until the end of 2020-21.
He said: “The wish to pass something on to your children is about the most basic, human and natural aspiration there is. Inheritance tax was designed to be paid by the very rich.
“Yet today there are more families pulled into the inheritance tax net than ever before – and the number is set to double over the next five years. It’s not fair and we will act.”
The Chancellor also announced that rents paid in the social housing sector will be reduced by 1% a year for the next four years.
There was little in the Budget aimed at the commercial property sector but industry body RICS was enthusiastic about the apprenticeship levy.
Its head of policy Jeremy Blackburn said: “Chartered surveyors agree with the Chancellor that we are not training, building or investing enough and the apprenticeship levy will help address the skills gap in our industry.
“We predicted that measures for home-ownership and property taxation would be at the heart of this Budget and the announced changes to buy-to-let mortgages will take some of the heat out of the market and free up some much needed supply.”

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