Propertymark has urged the government to tackle rising landlord costs immediately.The warning comes as new research suggests that landlords are spending 40 per cent more on mortgage interest year-on-year.

The average mortgage rate on outstanding landlord debt reached 3.4 per cent in August, so will increase further once products reach the end of their fixed and reduced periods.

Recent government shows that the rental market is increasing in value, as the total value of the buy-to-let mortgage market stood at £41.3 billion in 2022, an 88 per cent increase from 2013.

However, a position paper from Propertymark found a significant factor in the lack of growth in available properties in the UK are the “financial implications and barriers” in purchasing a buy-to-let property.

The report pointed to the impact of tax changes on the private rented sector including higher rates of property tax on buy-to-let properties, withdrawal of tax relief on mortgage interest, removal of 10 per cent wear and tear allowance, maintaining Capital Gains Tax (CGT) for rented property at 18 per cent for rented properties and 28 per cent for higher rate taxpayers and an increase in corporation tax.

Nathan Emerson, chief executive at Propertymark, says: “The UK Government must recognise that many landlords are suffering at the moment with surging mortgage costs that have been compounded by recent tax changes as well as concerns about reforms to legislation in the private rented sector and the ability for landlords to get their property back when things go wrong. 

“If the UK Government is serious about tackling rising costs in the private rented sector, then they must carryout a full review of all taxes impacting private landlords in order to understand the impact they are having and introduce pro-growth policies that bring down the cost of renting for both landlords and tenants.”