The Government recognises the important role that buy-to-let landlords play in the UK housing market and economy. At Summer Budget 2015, the Government set out a package of measures to reduce the budget deficit, rebalance the economy and make the tax system fairer. The measures included restricting the amount of tax relief landlords can claim on property finance costs to the basic rate of tax.
This is an issue raised in correspondence and through meetings with representative organisations including the Residential Landlords Association and the National Landlords Association.
The Government does not expect the changes to have a large impact on either house prices or rent levels due to the small overall proportion of the housing market affected. Furthermore, this change is being introduced gradually from April 2017 over 4 years, ensuring landlords will have time to plan for this change and adjust.