Campaigns Finance and Taxation Reform

Today’s tax rises will see rents increase

Housing Rents set to rise
Sally Walmsley
Written by Sally Walmsley

Tax rises for landlords being introduced today could see rents rise by 30% and stifle investment in properties to let, making it harder for renters to find suitable homes.

The warnings come from the country’s leading landlord body as the Government begins to restrict mortgage interest relief for landlords and tax their turnover rather than their profit.

Research by the Residential Landlords Association (RLA) has shown that two-thirds of member landlords feel they will need to increase rents to cope with the new tax burden.

The results also show that 58 per cent of members plan on cutting back investment in property.

Independent experts have argued that landlords will need to increase rents between 20 per cent and 30 per cent to cope with the extra cost of the tax hikes.

Ministers have argued that the move levels the playing field between landlords and homeowners, but the respected Institute for Fiscal Studies has said that the tax system: “is not, and was not, even before the recent changes, more generous to people buying to let.”

RLA Chairman, Alan Ward said: “Today’s tax increases contradict everything the Government has said about needing a larger rented sector to give tenants more choice and more affordable housing.

“It is tenants who will be hit hardest by these punitive tax increases. Aside from likely paying more in rent, in many places they will face a growing shortage of affordable places to rent.

“We call on Ministers to undertake a major review of the impact of this policy and if all the predictions about its impact are right, to abolish the changes in the autumn budget.”

 

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.

3 Comments

  • This is exactly what my dad will be doing… he will hike up the rent to cover the tax burden… such a stupid tax rule. And why does the field need to be leveled with homeowners? As a landlord you are running a business that has costs… mortgage interest is a legitimate cost to said business. If they are talking of levelling playing fields then all businesses should not be able to ofset rent payments against their income! Preposterous!

  • What about Councils charging landlords council taxes for void periods or for time renovating properties between old tenants leaving and new tenants taking over. This sounds like a scam and an extra tax on landlords to the detriment to future tenants as it will put pressure on the any rent rises

  • My landlord sold this house last year because of this new tax, moved to a new house only to be told this week that they are are planning to sell their house next year.
    I moved from a council house to private rent to get a better home. Not sure what is next.

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