Investors can sidestep new landlord tax and still invest in buy to let, say P2P providers

George Osborne’s recent introduction of a second home tax has hit buy to let investors hard – but providers of peer-to-peer (P2P) property companies are urging would-be landlords that, with the right approach, they can still make lucrative investments without being zapped by the new charge.

The P2P concept is simple – investors can take out mortgages and property loans in return for interest, using highly specialised versions of these traditional platforms.

Loans are typically secured against a UK property, and providers will possess a property if a borrower defaults on payments.

P2P providers are arguing that this method allows would-be landlords to sidestep Stamp Duty, Capital Gains Tax and complaints from problem tenants – and generates returns of around 5 per cent.

Paul Clampin, chief lending Officer of one provider, Landbay, said: “For those who still want exposure to the growing private rented sector, but without the hassle and costs of becoming a landlord themselves, Landbay offers a simple platform to invest in buy-to-let mortgages.

“Research shows that we are at the lowest risk spectrum of the peer-to-peer investment sector.”

Ian Thomas, co-founder and director of another provider, LendInvest, said: “Investing in property with LendInvest cuts out many of the negatives of being a landlord.

“You don’t have to worry about Stamp Duty, Capital Gains Tax, or gaps in tenancies. And you’ll never get a call from a tenant in the middle of the night about a broken down boiler.

“Instead you do get to enjoy a great, consistent return, and can diversify across a range of different properties much more cheaply than if you wanted to build your own traditional property portfolio.”