A survey suggests that renters are worried that landlords who have to pay more tax as a result of changes in buy to let allowances will make up the shortfall by hiking rents.
Results from the poll of 1,000 tenants conducted late last week show that over 50 per cent of tenants want rent controls to be introduced, while over 35 per cent would attempt to move to cheaper properties if rents in their existing homes were increased.
If rents did rise just 20 per cent said they would remain in their existing homes whatever the rise, while 17 per cent suggested they would be more motivated to buy and quit the rental sector completey.
The issue has arisen as a result of tax changes introduced in last month’s Budget.
Chancellor George Osborne announced that from 2017 he would be clamping down on buy to let landlords by removing the right to claim more than the basic rate tax equivalent in relief for mortgage interest. He is also tightening the rules about claiming for wear and tear by allowing claims only for money spent rather than the annual 10 per cent of rental that’s currently allowed automatically.
Insurance provider Makeitcheaper - which commissioned the poll - says the possibility of increased rents may heighten tensions between tenants and landlords.
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In principle as it becomes less financially attractive to be a landlord, they will leave the sector allowing the possibility of house price falls but rent rises due both to undersupply and the reduced tax breaks. On the ground certainly here in rural Somerset I am seeing some landlords leave but one, with a portfolio in UK of some 180 - 300 homes is right now buying 3 close to me. I am buying one now too and my partner is thinking of buying another .... we have strong buyer demand in the BTL sector.
@ Michael. All that's going to happen is that the tenants will end up paying more. 'It' always rolls downhill; always has and always will.
When oil prices rise, we don't see the oil companies acting with uncharacteristic generosity and swallowing the costs. In the financial services business, the higher the regulatory fees, the higher the client fees.
Bear in mind too that basic rate relief will still be available, so your basic rate taxpaying LL will not be affected at all.
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