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Tenants could face rent rises due to changes affecting the sector

Rent rises predicted when tax changes bite

By Maurice Shasha  //  Wed 22nd February 2017
Tax changes affecting the buy-to-let market may lead to fewer properties available to rent, potentially driving up rents.
Tenants could be hit with rent rises as a result of tax changes affecting the buy-to-let sector.

Tax changes, introduced by the government with an aim to slow the buy-to-let market and free up housing stock for first-time buyers, may lead landlords to sell their properties and turn away from the market.

This would mean fewer properties available to let. As rental demand remains strong, both in London and across the UK, this makes rent rises more likely.

According to the Royal Institution of Chartered Surveyors (RICS), rental prices could rise faster than house prices over the next five years.

The buy-to-let sector has had to absorb tax changes and stamp duty increases in recent years. This includes the additional 3% surcharge, introduced in April 2016, and changes to tax relief on buy-tolet mortgage payments, which will take affect in April this year but will be phased in gradually.

The latest figures released by the Treasury suggest that landlords are unfazed by tax changes, and are continuing to invest in the market. However, when the tax changes start to bite, this may change.

With more tenants renting in the long-term, partly due to a lack of affordable homes, there is a real need for flexible rental options for tenants and support for landlords to provide tenants with a rental property they can afford.

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