Ministers “need to act” as buy-to-let mortgage hikes risk further increasing rents, the National Residential Landlords Association has warned.
Data from Moneyfacts found that, amidst the ongoing conflict in the Middle East, rental payments for tenants have increased as landlords face “soaring borrowing costs”.
According to the analysis, landlords taking out a mortgage now face paying an average of £1,100 more a year than they would have at the start of March.
As a result, the NRLA warned that most landlords will be unable to absorb growing costs without passing them on through higher rents.
It explained that, according to HM Revenue and Customs, the average rental income declared by unincorporated landlords is £19,400 a year.
“Low-income renters now face the double whammy of rising rents, coupled with an ongoing freeze on housing benefit rates,” the association stated.
Therefore, it called on the government to take action to reduce cost pressures.
NRLA chief executive, Ben Beadle, said: “Whilst the government cannot be held responsible for the impact of the conflict in the Middle East, it should take action where its own policies will lead to higher rents.
“Growing taxes, uncertain costs associated with the Renters’ Rights Act and the ongoing housing benefit freeze will create the perfect storm for tenants.
“With so many people reliant on the sector for a place to call home, ministers need to recognise the real-world consequences of their decisions.”
Specifically, the NRLA is calling on the government to scrap next year’s income tax increase on the sector and keep the costs of joining the private rented sector Ombudsman and database as low as possible.
It also called for the reformation of the tax system to ensure it better supports proactive energy efficiency improvements to homes to rent and support for low-income tenants by unfreezing housing benefit rates.
“It is simply stereotyped nonsense that every landlord can somehow absorb ever-increasing costs indefinitely. They can’t, and as a result, it is tenants who will suffer most as rents continue to creep up,” Beadle added.
“The government needs to take action to support renters and ensure a healthy, vibrant market.”
tom.dunstan@ft.com
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