Landlords are considering rent increases for tenants.
The Residential Landlords Association, commonly known as the RLA, has found that 84% of private sector landlords are considering rent increases for tenants. This data has been compiled since the 2016 Budget came into action.
Landlords are being deterred by the enforcement of the extra 3% stamp duty on second homes. This plus the gradual reduction of tax relief for landlords over a 4-year plan, is deterring landlords from investing. They are reluctant to invest further buy to let properties because of the extra costs now associated. As many as half of are now contemplating selling. This will create a further shortage of rental properties.
The tax assault on the landlord sector is expected to lead landlords to increase rent. It is expected they will do this to cover the stamp duty increase and percentage rate deducted from tax relief. This will create a stranglehold on the rentals market for tenants.
Consequently, there are worries of a housing crisis. The worry is that applicants will far outnumber rental properties available. Rents will also be too high for a majority to afford. Only those on a high wage will be able to compete to secure a rental property. Those on wages that would once be able to afford a rental property, will be pushed out of the market.