Virgin Money NEW buy-to-let mortgages

It looks like Richard Branson's Virgin Money is keen to get into the buoyant lending market for buy-to-let mortgages.  Virgin Money has recently announced an improved mortgage range for landlords including a £750 cashback for many products.

The latest edition of moneyfacts rates their 4.19% fixed rate until April 2019 (reverts to a pay rate of 5%) as one of the best products for a first time landlord.  The loan to value is available up to a maximum of 70% although the arrangement fee is on the high side: £1995.

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Property CGT benefits to be cut

For many portfolio landlords the latest changes on Capital Gains Tax won't effect them.

For the more foot loose landlord the 'carrot' has always been there that if they are prepared to upsticks and live in one of their properties before sale they can 'wipe out' all their capital gain tax liabilities in one swoop by claiming Principal Private Residence Exemption on the property they are looking to sell.  I have done this once and obviously it saved me many thousands in a potential Capital Gains Tax (CGT) bill.  This will continue despite the changes.

Proposed CGT changes

Where a rental property had been the landlords PPR at any stage, the final 3 years in capital gains were exempt from a landlords CGT liability.  The Chancellor has just announced that this exemption will be scaled back from 3 years to 18 months from April.  Capital Gains Tax is currently charged at 18% for a basic tax payer and 28% for higher earners.

Most landlords 'won't panic'

Despite the headlines I don't see that this will effect most landlords long-term investment decisions.  I'm guessing a handful of landlords where the criteria applies may consider bringing forward the sale of their buy-to-let property.  Most of us will just carry on consoling ourselves at the same time that we are far more likely to retire way before all those people clinging on to the idea that their pension will be sufficient and that they will get their OAP before they are 70+.

Tax saving tips on CGT

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Tenants borrow to pay deposits

According to data from My Deposits, four out of ten tenants have to borrow money to pay for a rental property deposit. A quarter of those borrowing for deposit go to their parents for the money, ten percent borrow from friends, and eight percent get it from a bank or for a dastardly payday lender.


The data underlines the high percentage of tenants who appear to be living a hand to mouth existence. The concern for landlords is without any rainy day savings what happens if something goes wrong?

Landlords need to make sure if a tenant stops paying rent then they still have enough reserves to meet BTL mortgage repayments.

Keep a war chest, because it appears that many tenants haven't even got a piggy bank. 

Read more at MyDeposits

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CGT relief for landlords cut

This years Autumn statement has thrown an  an unwanted change to the Capital Gains Tax that could impact heavily on some landlords.

Previously a landlord could claim exemption for the final three years of capital gains on a property if they could prove the property had at one time in the past been their main residence. This years statement announced that the exemption period would be reduced in this April to just 18 months.

Other changes to CGT announced by George Osborne are hoping to close a current loop hole that allows foreign investors to avoid paying any CGT. The change might help cool the feverish prime London property market.

Read a summary of the Autumn Statement in the Financial Times

Read more on the CGT changes in the Telegraph

Read more on CGT changes in the Guardian

Read more in ThisisMoney

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OFT probe into leasehold 'rip off'.

We have highlighted in the past acquisations of exploitative charges and service by managing agents.
The OFT have just announced that they plan to launch a study into property managers, sinking funds, service charges and insurance costs.

The OFT will be looking into whether residents including landlords are getting fair value.

To respond directly to the survey follow the link.

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Falls in institutional investment of residential

According to data collected by law firm, EMW, institutional investors are putting less money into UK residential property than at any time in the last seven years. The data reports that the total money invested by pension funds and endowments in UK residential property in 2012 was just £495 million. This figure is down 31 per cent from the £719 million recorded in 2011, and is less than a quarter of what was invested in the sector back in 2010, when £2.2 billion was invested according to the figures EMW extracted from the HMRC.

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