More than half of landlords across the UK are expecting to increase the price they charge landlords for rent as a result of the tax changes that were recently announced in the government's Budget, it has been reported.
In the new poll released this week by Rentify, some 56 per cent of respondents said they will need to respond to the changes announced by chancellor George Osborne in the Budget by increasing what they charge their tenants. This is a direct result of the news that mortgage interest relief will be falling from 45 per cent to 20 per cent in the next few years.
This will potentially be bad news for tenants, although the level of demand from those looking to rent should mean that landlords are able to retain custom and not see any sharp rise in vacancy levels across the curse of the next few years.
Other landlords, however, are not feeling quite as confident about the change in tax laws, and as a result, many have said they may look to reduce the amount of money they are spending. Some 57 per cent are going to adopt a wait-and-see attitude that will mean they do not expand their portfolios at the current time, while 23 per cent are even considering selling off some of the properties they currently have on their books to help cut costs.
"These statistics are a stark reminder that if landlords aren’t incentivised to be landlords then they will just stop buying. The chancellor’s cutting of the mortgage interest relief remains a very unwelcome decision and one that could irreparably damage the approach of many buy to let landlords and quality of living for their tenants," said George Spencer, chief executive officer of Rentify.
He said that in many cases, mortgage interest relief helps landlords to offset the cost of high street lettings agent fees, home insurance, maintenance and repairs costs, as well as council tax and any ground rent.