A survey by the Residential Landlords Association (RLA) has revealed that 65% of landlords questioned are considering increasing their rents as a result of the budget.
The findings contradict the government’s case that the changes to the way landlords are taxed will not lead to a rent increase.
In his recent budget, the Chancellor George Osborne announced that any mortgage interest relief that landlords could claim would be restricted to the basic rate of income tax.
In addition, the automatic entitlement that a landlord enjoyed to a 10% wear and tear allowance will be replaced next year with a new scheme that covers actual expenditure.
The RLA has also revealed that the claim from the Chancellor that the UK’s landlords are enjoying a more favourable tax regime than homeowners is also not true.
Landlords are taxed on capital gains and rental income
The association points to two separate studies which showed that landlords are taxed on capital gains from their property as well as rental income, which homeowners are not.
The RLA’s chairman, Alan Ward, said: “It simply is not correct to say that rental property is taxed more favourably; comparing homeowners with landlords is like comparing apples with pears. They are very different.”
He added: “The Treasury should recognise residential landlords as a business and support the sector in providing vital homes to support a needed flexible labour market.
“The Finance Bill will drive up rents and choke off supply.”
Leeds bids farewell to ‘accidental landlords’
Meanwhile, one estate agency says that house sales in one city have been so strong that it’s become the first in the UK to see the end of the ‘accidental landlord’.
The claim has been made by Linley & Simpson in Leeds who say that growing numbers of people who could not sell their home during the recession opted to rent them out instead.
As a result, they were given the term of accidental landlords.
However, these accidental landlords have now begun selling their property while the firm is promoting suitable properties to professional landlords for the first time.
Professional landlords looking to expand their portfolio
The situation in Leeds is likely to be repeated in other cities with a strong economy and a growing demand for house sales – and for professional landlords looking to expand their portfolio.
The estate agency says there is a ‘window of opportunity’ for accidental landlords to sell their property to a home buyer or another landlord wanting a rental property.
These properties are in high demand and the firm’s director Will Linley said: “The upsurge in sales has marked the end of the accidental landlord.”
