Families to lose homes due to tax rises

Sally Walmsley
Written by Sally Walmsley

A leading housing expert has warned of families losing their homes as a result of extra tax burdens on landlords.

Dame Kate Barker, a former member of the Bank of England’s Monetary Policy Committee issued the warning to the Treasury Select Committee yesterday.

Pressed about the impact of recent tax changes affecting landlords, she warned that because changes to mortgage interest relief will affect existing housing stock, there was a danger that families who have been living in a house for some time and have been paying their rent could find themselves being forced to move “because the buy-to-let landlord no longer finds the yield acceptable or can’t afford it.”

From 2017 mortgage interest relief for rented housing will begin to be restricted to the basic rate of income tax only and landlords will be taxed on their income and not their profit.

Dame Kate authored an independent review of UK Housing Supply for the Government and her comments come just weeks after the Redfern Review into declining home ownership warned that “hostility to landlords” and “increasing uncertainty about their tax treatment” could reduce investment in the private rented sector.

The Residential Landlords Association is calling for protection for tenants already in rented housing by applying the mortgage interest relief changes only to new borrowing rather than to existing holdings.

Alan Ward, RLA Chairman said: “Dame Kate’s warning is a sober reminder of the potential social consequences of forthcoming changes to mortgage interest relief.

“These changes pose real risks for tenants where their landlord is simply unable to afford the extra costs being imposed on them and has no option other than to sell a property.

“Even at this late stage we would call on the Government to apply the changes only to new borrowing.”



About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.


  • “hostility to landlords” and “increasing uncertainty about their tax treatment” could reduce investment in the private rented sector.

    It is not only the above. It is the tenants who are suffering. I simply could not afford to keep the same rent for the exsisting tenants ( just to break even) I have had to reduce the costs on maintaintance/repairs but even then the sums did not add up. The tenants have been with me for a long time and their rent had remained the same. I have had to give notices, one of them already evicted, the rest in 2017. These poor tenants will end up at the council’s door step and accomodated at the B&B. Costing more to the tax payer and for what? Short term higher tax receipts for the treasury. Please note the the words SHORT TERM.

  • The real cause of the resultant problems from Osborne’s bombshell is the way that the basis of the landlord’s personal tax calculation has been changed, which pushes landlords into higher rate tax bands before the tax calculation takes place.

    This insidious and fundamental change in the calculation of taxation has not been made clear by the Government, either in the original announcement or subsequently. So many landlords are still unaware of the potential disaster that they are in, unless they have been informed by their professional advisers.

    Long-term property letting is not a sector that can quickly respond to these changes, especially given the current resultant slump in the market for investment properties. The main consequence is indeed the obligatory eviction of tenants, by landlords, to the disadvantage of both tenant and landlords. This has already resulted in landlords having to stop renting out properties. The recent Government approach to screw landlords is guaranteed to hurt and disrupt tenant voters, as well as turn both landlords and tenants against this Government.

    It was very good news when Osborne was kicked out of post, but his odious legacy continues. When is Hammond going to repair this disastrous change in government policy? Or does he want to be tarred with the same brush? This problem will not be going away, it will be increasing over the next 5 years as the policy bites deeper.

  • Also, the ‘Rent Smart Wales’ debacle has added extra costs to GENUINE landlords?
    Here in Wales, it is difficult to pass on extra costs due to inability of tenants to pay higher rents.
    The ‘cash in hand’ so-called rogue landlords (which will still exist after RSW) will still be able to undercut landlords that follow the rules and pay their taxes and keep their properties well maintained.

  • I have 4 buy to lets unfortunately I tied in at 6.3% for 5 years I only came of my deal 2 years ago, in the tie in period I had 2 house wrecked by non paying tenants and I was showing an actual cash loss of £36000 I am off my fixed deal and managing the properties well due to having good tenants, as a business I will not pay tax on any rent until the £36000 is used up and I start showing a profit. Due to the new rules will I lose this allowance and will I start paying tax straight away? If so I am going to sell up and put an end to this nightmare.

  • We need a concerted campaign by all landlords accidental as well as proffesional to consistantly lobby our local MP’s only when they are unindated with complaints and the annoyance factor kicks in will they act to to right the error by the previous chancellor

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