Tenant Tax Campaigners Urging Supporters to Contact MPs

Tenant Tax campaigners are urging supporters to contact MPs ahead of Thursday’s reduction in mortgage interest tax relief, which the group believes will push costs up for private renters.

Although the changes are just days away, Tenant Tax campaigners are still hoping to raise awareness.

From 6th April 2017, the amount of mortgage interest and other finance costs that landlords can offset against tax will be reduced to the basic rate of Income Tax: https://www.justlandlords.co.uk/news/landlords-guide-mortgage-interest-tax-relief-changes/

The little publicised awareness week that the Tenant Tax group is promoting aims to inform MPs of the detrimental impact of the changes.

Tenant Tax Campaigners Urging Supporters to Contact MPs

Tenant Tax Campaigners Urging Supporters to Contact MPs

Its website also provides a calculator for landlords to work out how much their costs will increase over the coming years.

A message on the Tenant Tax website highlights why letting agents should be concerned: “With rents increasing, it is likely that rent arrears will rise too. However, the longer-term consequences are likely to put many agents out of business.

“In the first instance, landlords will perhaps question whether they can afford to continue paying the agent’s fees and consider taking the properties under their own management.

“Many landlords will be forced to sell their properties, or they may be repossessed, leaving the agent with much reduced stock and therefore income.”

The website also warns that activity could fall in the sales sector: “Estate agents will initially be affected by the serious downturn in the buy-to-let market.

“Currently, 15% of mortgage approvals are for buy-to-let, and this market is set to disappear. That will lead to the housebuilders scaling back production, thus there will be fewer new builds to market.”

Meanwhile, ARLA Propertymark has assessed the latest changes to face the private rental sector.

The Chief Executive of the organisation, David Cox, explains: “It has been a year since the Government inflated Stamp Duty costs for landlords to 3%, and it has already made the Treasury £1.3 billion.

“That is more than changes to mortgage interest relief are expected to make in its first three years. This will only further squeeze the sector and make buy-to-let a less attractive investment for landlords.”

He continues: “Our monthly PRS report shows that since the Stamp Duty reforms came into effect last April, letting agents have seen the supply of rental stock decrease. In February, 44% saw supply fall as a direct result, while only 9% saw it increase.”

Cox also believes that the impending letting agent fee ban will make buy-to-let investment less attractive, as costs may be passed on through “inflated agents’ fees, which landlords pay”.

He adds: “A quarter of landlords are expected to stop increasing their portfolios as a result and a fifth plan to sell some of their properties.

“We’re facing a severe housing shortage at the moment and, if the supply of rental stock falls any lower relative to demand for housing, we’ll find ourselves in the midst of a real crisis.”

Are you prepared for the so-called tenant tax changes? And how do you think the sector will be affected by them?

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