Many tenants renting privately are likely to be hit with rent hikes following recent changes to the tax regime for landlords, according to new research.
A survey of almost 3,000 private sector landlords carried out by the Residential Landlords Association (RLA) found that 56% of buy-to-let landlords plan to pass on increased costs to their tenants following the surcharge on stamp duty for second property owners and cap on tax relief for buy-to-let mortgages.
The study also revealed that around two-thirds of buy-to-let investors do not plan on purchasing any additional residential properties for their portfolio, while almost a third of landlords are considering leaving the market altogether.
In his Budget following last year’s general election, the now former chancellor George Osborne cut the rate at which higher rate taxpayers could claim relief on their mortgage interest payments. The change, which will be phased in from next April, means that by 2021 only relief of 20% will be available.
Just over half - 54% - of landlords do not have confidence in the future of the sector with 70% anticipating further government policies aimed at landlords in the near future.
Other figures from the survey show 86% of landlords reported they had a good relationship, while 82% said that their tenants pay their rent on time.
The RLA is now calling on the new chancellor to review the tax changes made by his predecessor and get behind the nation’s landlords and encourage more homes to be developed for rent to meet growing demand from tenants.
David Smith, policy director at the RLA, said: “These results show how perverse recent tax changes have been. By implementing policy that will increase rents and choke off the supply of homes to rent, the government is making it more difficult for tenants to save for a home of their own.
“We are calling on the chancellor to use the Autumn Statement to hit the reset button.”
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.png)
Join the conversation
Jump to latest comment and add your reply
Exactly our experience. We are having to consider rent increases and also to start the process to evict some tenants to allow us to sell properties where we will almost certainly be paying more tax than rent received. The Stamp Duty changes, the grossly unfair restriction on tax relief, and the intrusive and wholly unrealistic assumptions being imposed by building societies to restrict lending, is making the sector unworkable for the majority of private landlords. Most are professional in how they run their portfolios, with good relationship with tenants and high quality properties, but they are being forced out of the market. The result will be less homes available to rent and higher rents for those that are available, and the destruction of the pension strategies of many investors - all-in-all, a disastrous and ill-thought out strategy devised by a Chancellor who saw a quick political 'win' without understanding the consequences. Hopefully, Philip Hammond will see what is happening and reverse it!
Please login to comment