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Wider Economic Impact of New Landlord Taxes

Posted by Jennifer Jameson on May 16, 2017
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Landlords spend £15.9billion each year running their rental properties, this is up from £7.1 billion in 2007. The breakdown of these costs is as follows:

  • £5.5 billion on maintenance
  • £4.7 billion on letting agency fees
  • £2.0 billion in service charges
  • £963 million on insurance
  • £904 million on utilities
  • £644million on legal and accounting
  • £218 million on administration
  • £1.1 million on other associated costs

However, due to new taxes 36% of landlords are looking to reduce their spending and one fifth are looking to increase rent, according to a survey carried out by BDRC, on behalf of Kent Reliance. These cuts are expected to impact the industries and jobs that depend on landlords for revenues. Across the private rented sector, total planned cuts would slash revenues by more than £500million per year.

Once again the government have been rather shortsighted with their attack on landlords. The increased tax paid by our landlords which only result in cuts to the industries servicing their properties and hikes in rent to those the government is apparently trying to help. Sales and marketing director of OneSavings Bank, John Eastgate, comments, “Landlords may seem like an easy target for political point scoring, but they play a vital role in the economy. Not only do they house a huge proportion of the country’s workforce, bridging the housing demand and supply gap, their spending supports thousands of jobs – whether builders, cleaners, lawyers and accountants or letting agents. Trying to tackle the housing crisis by targeting landlords with punitive taxes is very simple and politically highly palatable, but has unintended consequences. Either it means less work for all those who support the property industry, or it means tenants will have to foot the bill for the government’s tax raid, or both.”

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