Taxpayers subsidise buy-to-let landlords by £2bn

Buy-to-let landlords are enjoying a tax subsidy in the UK worth £2bn a year - the same amount being axed from the national housing benefit budget, research from investigative website Exaro, reveals.

That figure is expected to rocket to £3bn in coming years, raising questions about whether buy-to-let (BTL) should be subsidised so heavily by other taxpayers.

Landlords currently own 1.4m properties with a collective BTL mortgage of £160bn as of June - up 250,000 since the financial crisis of 2008, according to the Council of Mortgage Lenders.

While mortgage tax-breaks were scrapped for homeowners 10 years ago, landlords are able to claim relief on their mortgage interest. Exaro's analysis estimates this is worth around £1,400 per rental property.

Both the Treasury and HMRC say they do not calculate total BTL tax relief, citing mortgage interest a legitimate business cost for a landlord.

Landlords can also switch mortgage debt from their main homes to rental properties to boost their tax savings.

Chartered Institute of Housing policy director, Gavin Smart, told Exaro: 'While we might want an increase in the private-rental sector, the major problem in the housing market is chronic under-supply of homes.'

The body says around 240,000 new properties are needed each year in order to address the current shortfall.

Exaro said a political adviser working for a senior politician had revealed that all the mainstream political parties were shying away from tackling BTL tax-breaks because voter research revealed Britain's one to two million residential landlords were mostly located in key marginal constituencies.

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