By The rise in private rents across England, Wales, and Scotland over the past year has been attributed to various tax and regulatory changes affecting landlords, according to Propertymark, the letting agents’ trade body.
One significant factor contributing to the increase in rents is the tax relief reduction on mortgage interest costs initiated by Chancellor George Osborne in 2015. This measure, along with the removal of the 10% allowance for fully furnished homes, has led to decreased profitability for many landlords. These tax changes have made it challenging for landlords to operate profitably, prompting some to exit the sector altogether.
In addition to tax changes, landlords have faced increasing costs due to regulatory changes and expensive local council licensing requirements. The reduction in Capital Gains Tax allowances has further impacted landlords who choose to sell their properties.
Propertymark has highlighted the perspective of landlords, emphasizing that they feel unfairly targeted as the reason for rent increases. Landlords argue that government support, such as tax relief or relaxed thresholds, would be beneficial. They also call for greater recognition of the positive role landlords play in providing accommodation and urge the government to address biases towards tenants’ issues.
Propertymark’s data, along with insights from private landlords, indicates a decline in the volume of private rental properties available, leading to a shortage in supply. This scarcity, combined with increased demand, has contributed to rising rents as tenants compete for limited housing options.
To address these challenges, Propertymark is advocating for the UK Government to create an economic environment that benefits both tenants and landlords. This could involve implementing policies that support landlords while also ensuring affordability and access to rental housing for tenants.
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