Renters will bear the brunt of the government’s planned tax hikes, with almost half of landlords planning to increase rents as a result.
From April 2027, income tax rates on property income will increase by two percentage points as announced in last autumn’s Budget.
New research suggests the impact on rents will be severe.
A poll of National Residential Landlords Association (NRLA) members by the research consultancy Pegasus Insight found that 46% of landlords plan to increase rents over the next 12 months as a result of the tax rise.
Around a third (35%) of landlords plan to increase rents by more than previously planned because of the changes, while 33% say they plan to sell one or more properties as a result.
The Office for Budget Responsibility (OBR) has previously warned that the policy would lead to higher rents.
It comes as Housing Minister Matthew Pennycook admits that tax increases by the last government has been the main driver of landlords selling properties.
Yet the NRLA says such taxes have only grown further under the current government.
Meanwhile the association adds that tenants reliant on housing benefit to access the sector continue to face the impact of a freeze on the support they can access, making it harder for them to sustain tenancies.
The Institute for Fiscal Studies has warned that the tight fiscal position in which the government finds itself is “no excuse for a system that creates uncertainty for renters and unfairness between local areas.”
Ben Beadle, chief executive of the National Residential Landlords Association, says: “If the government is serious about easing cost of living pressures, it needs to look in the mirror.
“To be increasing the cost of providing rental housing, whilst keeping housing benefit support frozen, simply makes no sense.
“Renters will be left picking up the bill for the Chancellor’s tax hikes.
“The government needs to scrap plans that risk pushing rents higher and making it harder for people to find a home.
“And for those proposing rent controls as the answer, they do nothing to address the root cause of higher rents – rising costs and a chronic shortage of homes to meet demand.”
This article is taken from Landlord Today