Research carried out by BDRC Continental has found that 30% of landlords have increased rents in response to government tax changes in the private rental sector. The biggest increases were in the East Midlands. Here, 41% of landlords are currently reviewing their rents. The survey also found that just over 70% of landlords reported feeling negative about the future of the rental sector.
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Tax Changes Cause Concern in Private Rental Sector
Tax changes have caused much concern in the buy to let sector. Landlords with buy to let mortgages can no longer claim mortgage interest tax relief, as this is being phased out over the next five years. Landlords also have to pay 3% stamp duty when they sell a rental property.
Many pressure groups have criticised the government’s tax policies. They say landlords will have no choice but to pass on the extra cost to tenants. Judging by the research above, this would appear to be the case. However, the government is adamant that these tax changes are necessary to make it easier for first-time buyers to get a step on the housing ladder.
No Hope of Buying a Home
Despite the tax changes, the housing market is still depressed and many young people still believe that property ownership is out of reach for all but the wealthiest. This has caused the rental sector to grow. Many families are stuck renting a home for the long-term, with no prospect of being able to buy a property.
Urban Collective founder Mayank Mathu says, “If we’re going to become a nation of ‘forever renters’ then clearly the experience has to improve.”
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