A significant number of private landlords are planning to increase rents to help cope with changes to the way they are taxed, new research has suggested.
A study by Cover4LetProperty found that 32.5% of landlords are planning to increase their rent in the next 12 months in order to keep up with increased tax liabilities and costs as a result of legislation changes, including the scrapping of interest relief on mortgage payments.
While rents may be increasing, the research suggests that most buy-to-let landlords do not plan to change the size of their portfolios, with 83% of buy-to-let investors not looking to increase or decrease their property portfolio in the next 12 months.
In fact, just 14% of private landlords are looking to expand their portfolio within the next year.
When asked how happy they were with their tenants, 93% of landlords said that they were happy, 6% said they are “50/50”, and just 1% said they are unhappy.
Around half of the respondents also revealed that they are property investors, with the other half typically becoming accidental landlords due to inheritance, remarriage, or moving abroad and letting their home out.
Looking forward, many landlords are worried about the impact that “government meddling” will have on the private rented sector, along with increased tax liabilities and possible changes because of Brexit.
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Yes we are having to crank up rent so as to try to survive and it breaks my heart to do it but we have to try and find money from somewhere to pay this upcoming income tax bomb shell on imaginary profits. I really don't know why we bother to build a portfolio in first place - and this from the Tory government? The section 24 tax bill is staggeringly unreasonable. We are going to have to sell properties and ditch the occupants onto the council how on earth can this benefit anybody anywhere? If we don't then tax bill will be tens of thousands. I think we would be better treated in Communist Russia .
Peter, there are options available to you.
I am a chartered tax advisor specialising in property tax matters. Please email me if you would like a free discussion around the options available to you.
Email might be helpful!
Seanhughestax@hotmail.com
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