Landlords are looking to convert their buy-to-let properties into HMOs in a bid to beat tax rises.
From April this year, the tax relief landlords get for finance costs will be reduced to the basic rate of Income Tax. This will affect landlords with residential property.
As well as HMO conversions, commercial property is another option being favoured by landlords.
The buy-to-let market has been on the receiving end of a range of tax changes, including the extra 3% stamp duty surcharge on second homes which came into force in April 2016.
By converting a buy-to-let property into a HMO, landlords can potentially increase rental income and yields, thus not losing out to future tax rises.
Finance lender Roma Finance has said is has been involved in more HMO cases in 2016 than in any other year.
The buy-to-let market has slowed slightly in recent months, with fewer investors buying buy-to-let property in the wake of higher stamp duty charges and tax changes.
As a result of this, first-time buyers now have ‘a window of opportunity’ to climb onto the property ladder.
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