The government is being warned that without changes to the Finance Bill currently going through parliament it will effectively be forcing rent rises on to private tenants.
The Residential Landlords Association says that as the supply of rental homes falls and remaining landlords are facing higher overheads - in the form of increased taxation - it is inevitable that rents will rise to cover costs.
In a recent survey of RLA members, 84 per cent say they are likely to consider increasing rents following the government’s tax hikes, which include a three per cent stamp duty surcharge on the purchase of homes to rent and the phasing out of some mortgage interest tax relief.
The RLA is now calling for what it describes as “reasonable changes” to the Finance Bill to protect both landlords and tenants. It wants the government to scrap its mortgage interest changes and to remove the stamp duty levy where landlords invest in new property to increase supply in the private rented sector.
It has warned this tax raid will have a devastating impact on private landlords at a time when the Government needs them more than ever.
Backbench Conservative MPs have already voiced grave concerns, says the association. The former Welsh Secretary, David Jones MP has called on the government to stop “clobbering” landlords whilst the chairman of the influential 1922 Committee, Graham Brady MP, is on record as saying that: “there are some quite serious concerns about elements of it [the crackdown]” on landlord finances.
“Landlords do not want to increase rents unnecessarily but many will have to if they are stay in business as a result of these wholly unreasonable tax increases. It is unfortunately tenants who will end up paying the price either through higher rent bills or finding it more difficult to find somewhere suitable to live” says Alan Ward, RLA chairman.
“We welcome the concern of many MPs and hope that they will be able to persuade the government to change its mind.”