This week the Chancellor, George Osborne, delivered the first Conservative Budget for almost 20 years.
While Mr Osborne claimed that it marked the beginning of 'a new centre of British politics', those who tuned in, will know that this is not how many saw it.
Indeed, despite much attention being paid to the introduction of a new national living wage – a 'well-deserved pay rise' for the British public, as the Chancellor put it – there were also a range of fiddly tax changes well worth a second glance.
The Chancellor's decision to restrict Mortgage Interest Relief to 20%, the Basic Rate of tax, is however a point in particular I'd like to draw attention to.
It is a major reform, the restriction is likely to have significant and far reaching implications for the market. Why? Well the main reason is that purchasing property to rent has grown exponentially, with estimates that there are as many as 1.6 million buy-to let mortgages.
Indeed, Conveyancing Association members have steadily been undertaking more and more buy-to-let transactions and in the last few months this has increased even further with the pension freedom reforms introduced earlier in the year.
Now, restricting the tax relief for landlords could in theory make it easier for first-time buyers to get on the housing ladder, and that may well be behind the Chancellor’s thinking. But the implications for landlords and the rental market are likely to be even greater.
With the restrictions in tax relief, many commentators are now saying that the rents are likely to rise – the National Landlords Association puts it at around £70 a month – and this is clearly going to have an impact on those potential first-time buyers trying to save the necessary deposit to get onto the ladder.
The changes could also see the availability of accommodation for rent reduce significantly as landlords abandon the sector due to the rising costs.
Given these implications it is encouraging to see that these changes will be delivered in a proportionate and gradual way, and that implementation will not start until 2017 and, indeed, that the Chancellor did not opt for the complete abolition of tax relief.
The housing market, as we all know, is incredibly sensitive and the buy-to-let trend, has played a key role in keeping it buoyant. With interest rate rises likely later in the year, there is concern that this could have a negative impact on the market. Whether this policy change will in fact deliver the ‘level playing field’ the Chancellor desires, remains to be seen.
*Eddie Goldsmith is Chairman of the Conveyancing Association and Senior Partner at Goldsmith Williams