Many people feel anxious and uncomfortable when getting themselves into debt and understandably this is why many of us strive to pay off our mortgages as quickly as possible. But financially, this is not always the best decision when long-term debt is used as a tool to create wealth.
For many landlords, effective use of gearing has been the key to getting the most from their buy-to-let properties, as the interest element of their mortgages - and remember many buy-to-let investors have interest-only deals - has always qualified for tax relief, and so paying it off has not been quite so attractive, not when the rental profit and home equity could potentially be used to acquire more investment properties.
But of course, that is all about change.
The existing rules that permit landlords to offset all of their mortgage interest against tax will, from this April, be phased out over the next three years until 2020/21.
Once mortgage interest relief has been withdrawn altogether, the consequences of Section 24 will mean that landlords will only be able to claim back a basic tax rate deduction of 20% off their tax bill, which will eat into their rental returns.
But somewhat surprisingly, tenant referencing firm, Tenant Referencing UK, claims that up to 1.4 million landlords - 70% of approximately 2 million landlords in this country - may still be unaware of the tax changes coming into play from next month.
The research is based on a poll of 1,000 of its members, in which 70% of respondents said they were unaware of any tax changes being introduced in the sector.
The National Landlord's Association (NLA) fear that around 440,000 basic-rate tax payers - 22% of approximately 2 million landlords in this country - will move up a tax bracket once planned changes to landlord taxation comes in to force.
Richard Lambert, chief executive, NLA, commented: "When the government announced these changes, it claimed they would only hit a small proportion of higher-rate taxpayers. We now know that is complete tosh."
The NLA has suggested that the government should consider implementing the new rules only on new buy-to-let loans approved after April, but their calls for change have been ignored.
"Unless this happens, landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new home," Lambert added.
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