Some landlords admit to increasing their rents directly as a result of being taxed more through the various fiscal changes introduced in recent years.
A study of over 600 UK landlords by Simply Business, an insurer, found that one in three landlords said their properties are not as profitable due to the reduction of buy-to-let mortgage tax relief, which started in April 2017.
The mortgage interest tax relief landlords could claim was gradually reduced by 25 per cent each year. The changes started in April 2017 and reached zero in April 2020, when buy-to-let mortgage relief was replaced with a 20 per cent tax credit.
The controversial tax changes have reduced profits for many landlords, who were previously able to deduct all of their mortgage interest from their rental income and pay tax solely on their profits.
One in three landlords surveyed said rising taxes are one of their key challenges, while over a tenth said they’ve had no choice but to pass the cost of tax increases onto their tenants in the form of higher rents.
For 16 per cent of landlords, the impact of the buy-to-let mortgage tax changes has caused them to sell a property or consider selling one.
With the government announcing plans to introduce a national landlord register and scrap Section 21 evictions, half of landlords said they’re worried about further regulation of the rental market.
This comes at a time when there’s much uncertainty in the market, with three in five landlords in the survey claiming that confusing and rapidly changing government legislation is the biggest challenge they currently face.
Just under half of those surveyed said that the rising cost of being a landlord is the most significant threat to the future of the rental market. As a result, almost one in five landlords said they’re worried about the knock-on effect it could have on their ability to maintain their properties.
However, despite the impact of buy-to-let tax changes, a fifth of landlords said they would reconsider selling their properties if they had more clarity on legislation and regulation from the government.
Just under one in five remain optimistic about their ability to generate income and almost a third said they expect to see their rental yield increase by up to five per cent this year. Meanwhile, almost a quarter of landlords said they’re planning to buy another property this year.
Alan Thomas, UK chief executive at Simply Business, comments: “With countless changes to regulations, along with rising costs over the last few years, landlords are feeling the squeeze. Our study has revealed the worries faced by those in the UK, with many questioning the value of their portfolio and some even considering selling.
“Contributing over £16 billion annually, if a wave of residential landlords were to sell up then it would have a huge impact on the UK economy.
“What’s more, with landlords offering much-needed accommodation to over 4.4 million households, the hit to our communities could be devastating. It’s crucial that we recognise both their importance, and the support required by landlords to manage the challenges they face – including changes to government legislation, such as the reduction of buy-to-let mortgage tax relief.”
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Why would we need a Survey to tell us that when Regulatory changes, tax system and Licensing Schemes are the main driver of high Rents.
New licensing M,HMO for 3 bed Terraced in West London £1550. application fee plus now they are using an outside anti-LL organisation website to do the dirty work hence increased fee by £300, to cover that I presume, so you’ll need to hire a Digital Academic to fill out the application taking twice as long as paper version plus very likely to have mistakes because the LL knows the business but the guy on the computer pressing the buttons doesn’t, All LL unpaid time tying us to the desk 24/7 so what time do we actually have to be real LL’s.
Articles like this are just click bait, it’s stating the total obvious. I am out anyway in 2026, I suspect many others will be on my heels.
Correct Simon. And to the article. No shi£ Sherlock
Some people (primarily politicians, Shelter, Generation Rent, ACORN) needs the "bleeding" obvious spelling out to them.
We should respond accordingly and all just simply comment: “CLICKBAIT!”
Simon, I agree with Gromit on this one. Yes it's bleeding obvious but it needs to be rammed down their throats at every opportunity to keep the message front and centre
Don't all businesses pass on increased costs to the end user ?
Its not rocket science. Cost's go up then your prices go up. Its the same in any industry (Yet of course landlords will be portrayed as bad guys)
Well I must say by this has all come as a massive surprise. It’s not like landlords have been screaming about this to a deaf government since 2015, and obviously they weren’t sharp enough to spot the hidden message in the campaign ‘Axe The Tenant Tax’!! Still, this is what they wanted, so presumably they’re all thrilled, the fools.
I wonder how much that total waste of time cost ?
Unfortunately all these and other justified reasons that lead to rent increases will be used by the anti-landlord groups as evidence to justify the introduction of rent capping!
Another survey doing the job of the NRLA. It will fall on deaf ears though because no-one is taking this message to Government.
Tbh I’m sick of it all , they introduce that stuff and I’m selling up .
Life’s too short for this bs
Andrew Townshend "Don't all businesses pass on increased costs to the end user?"
Yes you're right Andrew The difference here is if you're an oil / gas company coining in the cash the Government supports you saying that you need the additional profits to make future investments. On the other hand, if you're a Landlord and you put up your prices to cover the additional costs you face, your branded as a parasite. The Government selective memory forgets that Landlords to have to make investments.
Sean, people want to call me a parasite then let them why would I care, sticks and stones and all that
Please login to comment