Two thirds of landlords planning to increase rents say Rachel Reeves’ latest tax rise is at least partly to blame.
In her recent Budget, the Chancellor announced plans to increase income tax on rental income by 2% from 2027.
In response, the Office for Budget Responsibility (OBR) says this will lead to higher rents.
New data now supports the OBR’s concerns.
In a poll of National Residential Landlords Association members by research firm Pegasus Insight, 65% of landlords increasing rents say the tax hike is an influence.
Some 68% cite the general increased cost of running a property as a reason.
Looking ahead, with Section 21 being abolished from May 1, landlords cite court backlogs in the court system for repossessing properties as their leading concern.
According to the data, 91% were either very concerned or slightly concerned about court wait times.
The government admits it takes an average of over seven months for the courts to process and enforce possession cases brought to it under the system replacing Section 21.
This is the longest it has been since the start of 2022.
When it comes to market conditions more broadly, 61% of landlords say said tenant demand was strong.
But even so, 24% say they have sold property over the previous 12 months, compared with just 5% who had expanded their portfolio.
Of those who have sold property in the last year, 27% did so with existing tenants in situ.
NRLA chief executive Ben Beadle comments: “This research should be a wake-up call to the government.
“Hiking taxes on rented housing will lead to higher rents.
“It’s not exactly clear how this approach will address the cost-of-living crisis ministers now say is the government’s number one priority.”
This article is taken from Landlord Today