Landlords ‘need to be talking their accountants’ experts urge, as they lose the right to claim full tax relief on their mortgage costs from next Thursday.

Former Chancellor George Osborne announced the changes in 2015, which he claimed would help first-time buyers - along with a 3 per cent surcharge on stamp duty payable on BTL properties and second homes, and an end to landlords' wear and tear allowance.

The tax relief will be phased out over the next three years and replaced with a 20 per cent tax credit by 2020, which will hit the profits of some landlords.

Alistair Hargreaves, of mortgage advisers and brokers John Charcol, said landlords ‘need to be talking to their accountants’ so they can calculate the likely increase in income tax over the next three years.

He said: “Then they need to be talking to their broker to see how best to minimise their mortgage costs. This may also include passing the property to a spouse or incorporating.”

He urges landlords to ‘check now to see if they could manage their affairs in a better way, both in regards to their tax, ownership and mortgage products.'

The amount landlords can write off for tax purposes will drop by 25 per cent each tax year until 2020 when they will have to declare all of their rent as income, pay income tax on the total and then claim back for 20 per cent of it as a credit.

Around 440,000 basic rate tax-paying landlords will be placed in the higher rate tax bracket as a result of the move.

Mortgage broker London and Country gives the example of a basic rate taxpayer with a property let out for £15,000 per year on an interest-only mortgage costing £10,800 per year.

Their current rental income is judged to be £4,200 because they are able to deduct that mortgage interest before declaring their taxable income.

But from next week, the same landlord will be judged to have income from the property of £15,000.

If the landlord earns £35,000 they would remain a basic rate taxpayer with total income of £39,200 under the current system - but the new rules calculate their total income to be £50,000 and this means they will be liable to pay 40 per cent income tax.