‘Labour leadership candidate Jeremy Corbyn has said he would change right-to-buy rules so they apply to the private sector but not council houses or housing association properties and raise taxes to fund new homes. He is also considering raising the top rate of tax to at least 50p in the pound and banning the ownership of property by non-UK-based entities. The FT examines how Mr Corbyn might fund some of his policies, for example through the use of QE, a financial transactions tax, a 7% rate of national insurance for those earning over £50,000, or clamping down on tax avoidance and evasion.
Source: Financial Times
Rate rise fear for buy to let sector
The Citizens Advice Bureau estimates that a third of the 16,500 repossessions that the Council of Mortgage Lenders predicts could take place next year will be buy-to-let properties. The charity says it believes 5,000 people in buy to let properties will face eviction this year, with up to 2,000 households in unauthorised buy-to-let homes at risk of eviction each year. It says the Bank of England’s intention to start raising interest rates will see the numbers rise.
Source: Financial Times‘
Not really a good news day for investors in buy-to-lets then. Even discounting the hopefully unlikely prospect of Mao Tse Corbyn achieving power, an increase in interest rates would be a double or triple whammy for individual investors coming on top of the various Budget changes including restricting tax relief for interest.