A TOUGH stance on taxes for private landlords has driven up rents by squeezing supply.
In April 2016, the Government added a three per cent stamp duty surcharge for private landlords. Twelve months later officials then removed tax relief on mortgage interest for higher rate taxpayers, making it a double blow for landlords.
in light of the government tax changes on Buy to Let, some landlords now see it as a less-attractive investment. As a result landlords have been either putting up rents to cover costs, moving their assets to a company or have been selling off their rental properties altogether.
This has squeezed the market and is having an adverse affect on the housing market. The Times recently reported an explosion in temporary housing that is costing taxpayers more than a billion pounds a year.
Figures by the charity Shelter also revealed that housing benefit does not cover rents in 95 per cent of the country, pushing thousands of families into homelessness.
Managing Director of Visionary Finance Hiten Ganatra believes that punishing landlords has ultimately led to tenants being out of pocket.
He said: “I warned earlier this year that the rental market would be squeezed in terms of available housing, and those which are available will become more expensive to keep as a result of the Government’s changes in 2016 and 2017.
“The Buy to Let boom that has consumed the country for several decades has ended abruptly, and as expected tenants seem to be the big losers as they face trying to secure rental properties in an ever-decreasing market pool and paying higher rents too when they do find somewhere.”
“Interest rate rises could see the problem escalate further. There may be a need for the Government to stop taking from landlords, who often make very small profit margins, and offer a little back.”
- Housing benefit remains the same as 2011 rent levels and has been frozen since 2016.
- Rents have risen by an average of 16 per cent since 2011.
- A total of 79,880 people were placed in temporary accommodation – including 123,130 children – last year.