Buy to Let

Buy-to-let landlords ‘hiking rent in response to tax changes’

A third of UK landlords have increased rents in response to recent tax changes.

This is according to research from BDRC Continental, which found that 30 per cent of landlords surveyed had increased prices.

Of these, the highest proportion did so in the East Midlands, with 41 per cent of landlords in the area reviewing rents.

Meanwhile confidence in the sector has dipped, with 71 per cent reporting a negative outlook.

Buy-to-let tax changes

The rent increases follow a raft of tax and legislative changes affecting the private rented sector.

Primary amongst these is the phasing out of tax relief for higher-rate taxpayers, and the introduction of the three per cent Stamp Duty surcharge.

Letting agents have also been affected by the recent ban on fees. The industry says the change will cost thousands of jobs.

The government says the buy-to-let tax changes are necessary in order to ensure that landlords are treated fairly for tax purposes, but pressure groups have long warned that the extra costs will be passed onto tenants.

Read Simply Business’s coverage of buy-to-let tax changes for 2017 to find out more.

 Generation Rent

However, the dip in confidence in the PRS seems at odds with long-term predictions for the sector.

In a separate report published this week, rental app The Urban Collective found that 51 per cent of Brits believe that property ownership will be out of reach for all but the wealthiest within as little as 15 years.

The combination of inflated property prices, flatlining wage growth, and rising inflation is already being felt. According to the most recent English Housing Survey, the number of households in the PRS has doubled since 2000 and is continuing to grow.

But as the sector has ballooned, renters’ experiences have seemingly worsened, with major letting agents like Foxtons regularly being the subject of exposés and legal action.

Commenting on the renting figures, Urban Collective founder Mayank Mathur said: “Fifteen years ago, renting was a stopgap until people could save enough to buy. Today, owning a home is a long-term goal and in 15 years’ time it might just be an impossible dream.

“If we’re going to become a nation of ‘forever renters’ then clearly the experience has to improve.”

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