Date Published 03 August 2018
The new taxing regime for private landlords is going to force rents spiralling upwards by at least 15% over the next five years, as many private investors are being forced out of the market.
RICS (Royal Institution of Chartered Surveyors) is sending out the stark warning the ex- Chancellor, George Osborne's policies will severely impact tenants' lifestyles, due to the government's strategy of making it easier for first time buyers to get onto the property ladder.
The onerous stamp duty levy on BTL properties and second homes, together with the reduction of mortgage interest tax relief, is causing greater numbers of landlords to 'throw in the towel' and over the last year less and less rental homes have stayed in the sector.
The majority of landlords remaining in the market are adamant that as the supply of rental properties has fallen and their margins are dropping, rents will be increased.
RICS has carried out a recent survey of property professionals and from its findings predicts that rents will be raised by 15% during the next five years.
Geoff White of RICS said: ‘The situation in the private rented sector gives great cause for concern as supply continues to drop. New policy on taxes and stamp duty has made it so difficult for landlords, at a time when the UK needs more homes to rent, that many continue to exit the market."
David Cox, chief executive of a letting agents' trade body, said: "This combination has unsurprisingly started pushing landlords out of the market. We predicted this, and we warned Government. Our fears are now being realised and renters are suffering."