Investors in buy to let properties, including the large numbers of those in or heading towards retirement who have become landlords in recent years, might well be feeling a little bruised after the last Budget. By Tony Watts OBE.

After many years of enjoying runaway returns, the Chancellor – in his first Budget of this Parliament – decided to “level the playing field” somewhat and reduce some of the advantages that many feel have skewed the housing market in favour of landlords for some time.

But has he levelled it to the point where you might consider putting your money elsewhere?

Certainly residential property has proven a sound investment in the last few decades: across the market, according to the ONS, prices have increased on average by 6.9% a year since 1980. For those specifically buying to let, an investment of £1000 in 1996, report lender Paragon, would have realised up to £13,000 in 2014. Few traditional investments can compete with that.

Like all these things, read beyond the headlines, study the small print and – perhaps – the Chancellor has simply given the bridle a tug to one side rather than pulled the horse to a stop.

Yes, it will certainly reduce the bottom line for some, but the changes will take time to make their full impact (2020), there are some ways round some of them, and don’t forget that the underlying fact that houses are still in short supply… and demand will always drive prices up.

As well as enhancing capital growth, this will also continue to make it difficult for people to get into the property ladder… leading to more people renting. And so on. Certainly there is a feel abroad that the changes announced in the Budget will work their way through to pushing rents further northwards.

The biggest impact of the changes will hit those paying higher rates of income tax because relief is being tapered down to the 20% tax band between 2017 and 2020. Ways round this include placing your investment into a business – which is not difficult to do with expert advice and ensuring that your partner is also using up their full personal allowance (rising to £12,500 by 2010).

And other costs can also go through there too – including agents and other professional fees.

On top of the change with mortgage relief, the Chancellor is removing the “wear and tear allowance” which basically set aside 10% of rental income from being taxed. This will be replaced by relief on what is actually spent on furnishing and fittings, which will certainly affect the bottom line of those landlords with newer properties.

But of course, not everyone has a mortgage on their property, and not everyone pays higher rate tax. And that includes a great many people in retirement relying on a single property to perform rather better than an annuity or drawdown pension, or who have simply become accidental landlords following the death of a parent.

For those who are highly leveraged and paying higher rate tax, one option to explore is remortgaging: there is a huge choice on the market now and rates have been driven down to new lows in the last year. Rates will depend on the loan to value percentage but APRs of sub 5% are available, with fairly juicy introduction rates to entice you in.

Moreover, while your ROI might be shaved by half a per cent or so if you do cop for all the Chancellor’s new wheezes, other factors will certainly account for a far bigger chunk than that – not least getting the full market rent and – critically – keeping it at maximum occupancy. Here is where a good agent will earn their corn.

And on the plus side, the recent shifts in IHT and reduction in stamp duty will also have helped boost the benefits of property ownership.

So the bigger picture: most parts of the UK currently see a return through rental income of around 4 – 5%, with capital growth running at a similar figure – making property investment a far more attractive proposition than many other financial vehicles.

Importantly, those returns are available throughout the UK: in fact, media stories on buy-to-let hotspots regularly throw up regional locations as the best place to invest – often because rental returns are so good, although capital growth may lag behind London.

Privately rented accommodation remains a vital part of the housing equation in the UK and the Chancellor isn’t likely to kill it off any time soon. And with other tweaking going on within the pension system, it still holds an attraction for many.