The vast majority of landlords in the UK are looking to increase rents as a result of recent tax costs they will have to meet, according to one survey.
The Residential Landlords' Association (RLA) says 84% of landlords in the private sector are considering rent increases as result of the Chancellor George Osborne's changes to the tax regime. The survey also found that 78% of landlords say that the tax changes will deter them from investing in more buy to let properties.
In addition, nearly half of landlords say they are considering selling their properties. This is despite growing demand for rented homes with real estate firm Savills recently predicting that by 2021 UK will need another one million new rental homes.
Landlords may be looking to sell rental property
The RLA's chairman, Alan Ward, said: “The tax policies of the Chancellor will impact on tenant lives with more than four in five tenants facing rent increases, but around half of landlords may be looking to sell rental property which may result in their tenants being given notice to leave.” He added the myth that landlords are to blame for the housing crisis should be brought to an end and the government should base their policies “on fact”.
The RLA says that while the Chancellor's bid to free-up properties to enable more homeowners to buy them means the government should also appreciate that the tax changes make it more expensive and difficult for people to buy a home.
The organisation points out that as rents increase, the government is effectively preventing those it is wanting to support into home ownership as they will struggle to save the deposit needed.
In addition, the RLA is also calling for all rental property to be exempt from the 3% stamp duty charge since nearly 40% of landlords say that if the levy was not imposed, they would invest in more new build rental homes.
Prime rental sector growth slows
Meanwhile, real estate firm Knight Frank says prime rents for properties in the home counties grew by 1.9% between January and March, a slowdown on the figures recorded for the previous quarters. The firm points out that growing stock levels and landlords becoming flexible on rent means tenants are benefiting.
Knight Frank's partner for the Home Counties, Jemma Scott, said: “The findings reflect a shift for the Home Counties lettings market.” She added that tenants for prime properties were finding the prospect of renting cheaper than buying since they have to pay extra stamp duty and, in some cases, the savings could equate to four years of rent.
