What is happening to property in the UK?

George Osborne changed the law so that private Landlords could incrementally no longer claim interest relief on their investments.
Sounds technical until you realise that if you make £10,000 a year in
rent, you might previously pay say £7,000 in interest then (ignoring agents & maintenance) pay tax on the balance – £3,000.
In 4 years time (25% per year) you will pay tax on the £10,000 then you will pay your interest, then there will be a shortfall then you will most likely have to sell your rental property. And that will happen accross the board, with our levels of gearing, which will lead to many repossessions and a gargantuan property crash – or am I missing something?

Source:
FT
The Guardian

One Reply to “What is happening to property in the UK?”

  1. Oh! And did I mention that the Bank of England are desperate to increase interest rates so that they have room to manoeuvre come a downturn, which can only make things worse for the rental sector.

    (Mervyn King – The End of Alchemy).

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