Two thirds of landlords consider post Budget rent hike

Research from the Residential Landlords Association has found that 65% of landlords are considering increasing rents as a direct result of the Budget.

The Summer Budget saw the Chancellor restrict Mortgage Interest Relief for residential landlords to the basic rate of income tax.

Additionally landlords will no longer be entitled to an automatic entitlement to a wear and tear allowance for their properties, leaving them with no recompense for general wear and tear of a property.

The RLA’s findings undermine HM Revenue and Customs’ assessment that these measures will have no significant impact on rent levels.

The Chancellor had argued that landlords are taxed more favourably than home owners. Both the Institute for Fiscal Studies and the Conservative’s favourite think tank, Policy Exchange, have warned that this is not correct. Unlike home owners, landlords are taxed on rental income and capital gains.

Alan Ward, chairman of the Residential Landlords Association, said: “The reality is that the Chancellor’s belief that rental property is taxed more favourably than home owners is simply not correct.

“Rather than supporting the sector to provide the vital homes needed to support a flexible labour market, today’s Finance Bill will choke off supply and drive up rents.

“The belief that landlords should be compared to home owners is like comparing apples with pears. The two are vastly different.

“It’s time the Treasury recognised residential landlords as a business.”

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