The majority of private landlords are considering increasing rent prices to accommodate the higher taxes they now face, according to the Residential Landlords Association (RLA).
In a survey, the RLA found that 84% of landlords in the private rental sector are likely to increase rents following recent changes in the buy-to-let sector, introduced by Chancellor George Osborne.
Most Private Landlords Set to Increase Rents
The organisation also says that 78% of landlords feel the changes will deter them from further investing in rental properties, with half of all landlords thinking of getting rid of their investment properties.
This news arrives as estate agent Savills reports record demand for rental properties, predicting that one million new homes to rent will be needed by 2021.
The RLA believes that while less investment in buy-to-let properties may meet the Chancellor’s desire to free up homes for homeowners, these tax changes will make it increasingly difficult and more expensive for the large amount of people who cannot afford to buy, or who prefer not to, to access affordable housing.
In pushing up rents, the Government is in fact hitting those it is eager to support into homeownership, by making it more difficult for them to save for the high deposits they need.
The RLA is now calling on the Government to exempt all rental property making a net increase in the supply of new housing – new builds – from the 3% Stamp Duty surcharge that was introduced at the start of the month.
Some 39% of landlords said that they would be more likely to invest in new build rental properties if they were exempt from the higher tax rate.
The Chairman of the RLA, Alan Ward, says: “The Chancellor’s tax policies are impacting on tenants’ lives – not only are more than four in five facing rent increases, but half of landlords may be selling rented properties, which might result in tenants being given notice to leave their properties.
“Ministers need to end the myth that landlords are to blame for the country’s housing crisis and base policy on fact, not political expendiency.”1
If you are worried about how current and forthcoming tax changes will affect your lettings business, we have financial advice for landlords: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/