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Buy-to-let: make it pay

Buy-to-let was the investment that had it all... until the chancellor set his sights on it. Jonas Crosland and Rosie Carr examine how you can still turn a profit from a residential letting business
March 18, 2016 & Rosie Carr

With higher stamp duty on second homes starting in April, it’s hardly surprising to see aspiring buy-to-let landlords and second-home buyers rushing to beat the deadline. The Bank of England reported 74,581 mortgage approvals in January, which represents the largest monthly growth for seven months and is up 21.9 per cent from a year earlier. On top of this, in the same month net lending picked up to £3.7bn; that’s the second highest monthly reading since the financial crash.

Three-quarters of surveyors anticipate a rugby scrum for new instructions ahead of the April deadline.

The question is: what happens after the new tax regime comes into play? It would be tempting to conclude that buy-to-let lending will fall off a cliff, a trend that could raise difficulties for the aspiring renter, where demand will not be going away. In the three months to January 2016, there was an increase in interest from prospective tenants, with a third of surveyors reporting an increase in instructions in London.

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