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HMRC Warned - half of landlords not investing because of tax hikes

Over half of private landlords responding to a new survey say recent tax changes in the rental market have had a negative impact on their investment plans.

That’s the finding from a new study by the London School of Economics for the National Residential Landlords Association.

Based on responses from over 1,400 private landlords across England it finds that 52 per cent say tax changes have deterred them from making further investment and acquiring more properties.


Recent changes have included restricting mortgage interest relief to the basic rate of income tax, a three per cent stamp duty levy on the purchase of additional homes and a decision to cut Capital Gains Tax to 18 per cent for everything other than on gains from the sale of residential property.

Overall, a third of respondents said the reform to mortgage interest relief was the tax change having the greatest effect on the operation of their rental business. 

Of this group, 39 per cent said the change meant that they were not proceeding with planned future purchases whilst 31 per cent said they had put plans on hold. 28 per cent said they were taking steps to leave the sector altogether.

Some 27 per cent of landlords said that the stamp duty levy was significant; followed by changes in the tax treatment of furniture and fittings (26 per cent), and in the capital expenditure allowance (24 per cent).

Ben Beadle, chief executive of the National Residential Landlords Association, says: “The NRLA will be studying this report carefully as it prepares detailed plans to support investment in the sector.

“That said, it is clear recent tax increases have deterred investment in the sector. With the demand for homes to rent outstripping supply this will only hurt tenants as they face less choice, higher rents and find it more difficult to save for a home of their own as a result.”

Christine Whitehead, Emeritus Professor of Housing Economics at the London School of Economics and a co-author of the report, adds: “Our work on taxation of landlords across Europe (also in the report) suggests that as a result of the changes in taxation since 2015 individual landlords in Britain are being increasingly disadvantaged when compared to corporate landlords and other investment types”.

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    When you can put £20k a year into the stock market without fear of having to pay ANY tax on it (except IHT if you die) why would anyone want to invest in property where you not only have to pay higher tax than any other business but you also run the risk of non-paying tenants and Govt interference costing you thousands?

    I don't know whether the Govt is trying to destroy the PRS or just thinks it is an easy target, but the PRS is shrinking fast and soon there will be a major shortage of decent housing at affordable rents, with no alternative in sight.

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    I don’t agree with a major shortage of rental property on the market .Tge government are giving large tax brakes the the BTR sector, Tesco John Lewis, Lloyd banks are building

    What happenings is that England is turning into a nation of renter snd once the government squeezed out the private landlords, the buid the rent sector will zoom up the rents even more the loser’s will be Tenants & private landlords well they will just leave due to continued red tape


    Please translate, there are too many errors to make sense of the post. I gave up reading it. Like a cv, you only get 15 seconds to impress the reader and then the post is discarded.

    Bill Wood

    I always write in a Word document, there is no time delay between typing a character and it appearing on the screen. Typing directly into the Comment box is delayed very slightly as the keystroke has to be sent on the internet. Word also checks spelling etc.
    I then copy and paste into the Comment box.

  • icon

    They want us destroyed to force Tenants to Rent or Buy the tens of thousands of high rise monstrosities for Developers to make a killing & subsequently the Big Boys as mentioned above to take over.
    SDLT of course it’s significant in London buy a property for £500k that will set you back £30k stamp duty up front and probably only get a flat for that, your first 3 years rent swallowed up taken other costs into Account (excluding license if req’). The so called SD holiday was a bad joke for LL’s, what actually happened Mr George Osborne double SD for LL’s / second homes buyers, then comes along Mr Rishi Sunak and halves it temporarily calling it a SD holiday, do they think we are all idiots. Anyway don’t worry it will get worse and if in trouble sell at a loss, then Rishi can get another £30k SDLT from next mug.

  • icon

    The great irony once again! The article two above talks about attempts to encourage landlords to help resolve the homeless crisis. This is a daily event!

  • George Dawes

    Can you blame them ?

    The public sector really have zero idea how business works , do they ?


  • icon

    I'm getting out of the game before it's too late. Enough is enough... That'll be a dozen less rental properties available...

  • icon

    It’s time to sell up, there’s no incentive to rent properties out nowadays. I was fortunate to initially have a good tenant, I haven’t increased their rent since 2015 as I was happy to make a small profit knowing the house was looked after and kept clean. This past year I have replaced the boiler and had a new roof fitted along with electrical repairs due to EHIC, total cost £11,000. My tenant works part time and gets rent paid via UC. I advised them that due to the costs incurred I would increase the rent by a token £20 per month which they had to pay themselves, guess what, no payment received since August and their attitude has changed beyond belief over £20, I considered myself a good LL however I can’t be bothered to chase the £20 so I am issuing S21 and selling up,

  • icon

    Very sad Benefit is a disease it take over, it’s an addiction they never give it up or want to contribute anything.
    Anyway more big costs coming for Tenants in London water meters being forced. I seen a Bill for one already, a one bed Flat for 3 months 50 units = £150.00 so looks like £500 to £600.pa, that’s equal to what a house water should be.

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    For Tenants with pets / dogs more water, I see them washing them in the bath I don’t like it one bit, or having to power wash the wheeler bins, you all should know what I mean.

  • icon

    Ealing announced 2 New Licensing Schemes extra to Mandatory HMO’s.
    An Additional Licensing Scheme much similar to Mandatory Borough wide as I understand it which is £1100.00 plus £50.00 for every habitable room on top Applicants fee.
    New Selective license for 3 designated Areas, non HMO’s East Acton, Southall Broadway and Southall Green £750.00 Application fee.
    I have had those 3 licensing unfairly applied to me in the past but New Schemes cover far more than the previous Schemes ending.

  • Theodor Cable

    So all will happen is rents will increase.....
    Stupid Councils.......


    Increased costs are always picked up by the end user whatever the business, but then public sector employees are too thick to understand that one.


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