First Complete and Pink are calling on mortgage brokers to update their landlord clients on buy-to-let tax changes coming into force next month.

From April 6, mortgage interest tax relief for individual residential landlords will gradually be restricted from 40% to the basic rate of income tax, which is currently 20%.

The firms are urging brokers to ensure landlords on their books are speaking with a qualified accountant and raise awareness of the affect these changes will have on landlords in their region.

First Complete and Pink hosted seven specialist buy-to-let workshops across the UK in February, giving brokers the opportunity to speak with experts about how the changes will impact them and their customers. At the workshops, brokers were given an overview of the new tax regime, discussed a variety of specialist solutions, HMOs and Limited Companies in particular, and lending into retirement.

Roger Morris, Director of Sales at specialist lender Precise Mortgages, also discussed their bespoke ICRs and gave a general market overview at each conference. 

“Brokers have a vital role to play in flagging the impact of the tax changes to clients, and to point them in the right direction of a qualified accountant,” says Toni Smith, sales operations director for First Complete and Pink.

“It is equally important that brokers avoid giving further detailed commentary or debate around the topic of tax treatment of BTL portfolios – as this could be constructed as advice and relied on by the client. “

He says there are challenging times ahead for landlords and that they will need all the support they can get in the coming months.

David Copland, director of TMA mortgage club adds: “There is a real danger the buy-to-let market could become polarised by the end of the year. Some lenders will continue to specialise in business buy-to-let, landlords with property portfolios or those with properties owned by a limited company.”

“We could also continue to see other lenders focusing on smaller, private landlords.”

“Advisers must understand how these changes will affect different landlords as a result. In particular, Directly Authorised firms must take every opportunity to appreciate the nuances of the BTL changes before upcoming broker roadshows in the Spring.”