Majority of landlords to hike rent due to Reeves’ tax raid
The majority of landlords increasing rents blamed Rachel Reeves’ new tax on property income from April next year, a survey has shown.
According to the National Residential Landlords Association (NRLA), two thirds of landlords (65 per cent) raising prices over the next year cited the government’s plans to charge a two percentage point tax rate on property income.
The new levy was included in a package of tax hikes announced at last year’s Budget as Reeves increased the size of her headroom to just under £22bn.
The tax hike is projected to raise around £500m by 2030. Pensions minister Torsten Bell advocated for charging taxes on property income when he was the chief executive of the Resolution Foundation.
Prior to the decision, landlords warned that the new levies would feed through to higher prices for renters across the country.
Data by the Office for National Statistics (ONS) has shown households suffering from higher rent prices, which have outpaced than increases in house prices.
In the 12 months to last December, monthly private rents increased by four per cent to £1,368 while average house prices edged up by just 2.5 per cent.
Ben Beadle, chief executive of the landlords industry body, said the survey findings, based on the responses of some 837 members, should come as a “wake-up call” for the government.
“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, Beadle said.
Property rent markets to be hit by red tape
He also raised concern about fresh red tape due to hit the housing sector over the coming months.
From 1 May, the government is set to end ‘no explanation’ repossessions, with worries mounting that court backlogs could pose risks for property owners.
Internal government figures show it takes around sevent months for courts to enforce possession cases, according to the NRLA.
Nine in ten property owners said they were concerned about the backlog in the justice system.
“With no fault repossession due to end in just a matter of months, responsible landlords are seriously concerned about court backlogs.
“Ministers have pledged to ensure the justice system is ready to process cases where landlords have good reason. However, as of yet, they have failed to explain what ready means.”