SMI scheme cuts - good news for landlords?
In the euphoria following the good news on capital gains tax some of our buy-to-let insurance customers may have missed another change mentioned in the recent budget.
Debut chancellor George Osborne slipped in cuts to the Support for Mortgage Interest (SMI) scheme. The government funded scheme pays mortgage interest on loans up to £200,000 for many people who are on benefits.
Mr Osborne declared that the SMI scheme needed to be on "a more sustainable footing" and although the details are not yet clear it looks like the interest rate used to calculate the payments may be almost cut in two. A household with a £200,000 loan would be approximately £260 worse off.
This could prove to be a blessing in disguise for landlord insurance policy holders as it may put people off buying, increasing demand for buy-to-let properties.
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July 05th 2010