An increase in rents in the next 12 months appears inevitable in the UK in view of changes to mortgage interest relief. This finding was revealed from a survey of 3,000 private sector landlords conducted by the UK Residential Landlords’ Association (RLA).
According to the survey, 56 per cent of the respondents (landlords) intend to increase the rents of their properties in the next one year. This comes in the wake of several changes to taxation, including taxing income of landlords rather than their profit; restriction on payment of mortgage interest relief to the basic rate of income tax; and an additional three percentage points duty on buy-to-let properties. A majority of the landlords (70 per cent) feared that more taxation policies could be aimed at them.
Two-third of the landlords does not intend to invest in the property market going forward. Likewise 58 per cent of the landlords are unlikely to upgrade their existing properties in the UK.
There are two important outcomes of the survey – the inevitable increase in rent could further contract the rental property market in the UK and reduce the number of homes available for rent; and augment income for existing landlords. Nevertheless, the RLA has urged the new Chancellor to review the tax changes.
The RLA is calling on the new Chancellor to review the tax changes made by his predecessor and get behind the nation’s landlords and encourage more homes to be developed for rent to meet the demand.