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Buy-to-Let Tax Changes will Push Rents Up
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Buy-to-Let Tax Changes will Push Rents Up
Over two thirds of landlords believe that changes to buy-to-let mortgage interest tax relief will cause rents to rise, according to a survey by the Deposit Protection Service (DPS).
In the summer Budget, Chancellor George Osborne revealed plans to cut the amount of tax relief available for interest on buy-to-let mortgages.
The study, of 4,480 landlords, found that 69% believe the changes will push rents up, with more than a third stating that they are considering leaving the private rental sector. 35% said they might sell their rental properties.
Managing Director of the TDS, Julian Foster, comments on the findings: “Many landlords are currently facing a double-whammy of tax changes that could lead to increased rent for tenants – forcing them to sell or leave the rental market.
“Many landlords are small businessmen and women or accidental landlords, and taxation increases can affect their livelihoods and financial wellbeing.
“With many commentators predicting an interest rate rise next year, landlords are facing a series of financial challenges over the next few years.”1
A future interest rate rise is also likely to have an impact on landlords’ finances, with 33% of respondents saying that they would pass on these costs to their tenants.
Around two thirds (62%) of landlords also said that they would be worse off due to changes to wear and tear tax relief.
From April next year, the automatic 10% tax break for wear and tear will be cut and replaced with tax deductions for the actual cost of replacing or repairing a property’s contents.
Do you agree with the findings of the survey?
