New research has revealed that many tenants are likely to be hit with rental price hikes, following recent alterations to tax regimes.
A survey of nearly 3,000 private landlords from the Residential Landlords Association showed that 56% of buy-to-let investors plan to increase taxes in the short-term. This follows the changes to stamp duty and caps on tax relief, scheduled for next year.
In addition, the study found that nearly two-thirds of landlords do not plan on buying any more properties to add to their portfolio. Nearly one-third of landlords are thinking about leaving the market for good.
Following last year’s general election, then Chancellor George Osborne announced plans to cut the rate at which higher rate taxpayers can claim relief on their mortgage payments. These changes are to be phased on from next April and by 2021, all buy-to-let landlords will only receive relief of up to 20%.
54% of landlords said that they did not have full confidence in the future of the sector. 70% feel that the Government will outline new policies affecting landlords in the near future.
More pleasingly, 86% of landlords said they had a good relationship with their tenants. 82% of landlords questioned said that their tenants pay their rent on time.
Buy-to-let landlords to increase rents to offset charges
The Residential Landlords Association is now calling on the Chancellor Philip Hammond to review changes made by Mr Osborne. The firm believes that he should get behind the country’s landlords and encourage more homes to be developed for rent, to meet growing demand.
David Smith, policy director at the Residential Landlord Association, said: ‘these results show how perverse recent tax changes have been. By implementing policy that will increase rents and choke off the supply of homes to rent, the Government is making it more difficult for tenants to save for a home of their own.’
‘We are calling on the Chancellor to use the Autumn Statement to hit the reset button,’ he added.