The government's Office for National Statistics has revealed that it conducts an exercise to assess the likelihood that landlords will increase rents in England and in Wales.
The check takes place every 12 months in England and every nine months in Wales.
The latest check indicates that rents were more likely to have been hiked in England and Wales since the last check than they were a year earlier (63 per cent in England and 44 per cent in Wales).
The hikes have been larger this time round, too: of those where rents had risen, in Wales they were up 11.3 per cent and in England 9.7 per cent. A year earlier it was 10.5 per cent in Wales and 8.4 per cent in England).
In England, rents are most likely to have risen in London (77 per cent) and least likely in the North West (42 per cent). However, those rents that did rise in the North West did so more than anywhere else – at an average of 12.3 per cent.
Greg Tsuman, president of ARLA Propertymark, says: “The rental market is clearly in the depths of a crisis, and it is under immense pressure from multiple fronts. The main issue, however, is that the Treasury seems to be overlooking the fact that it is eating the golden goose with the current tax structure imposed on private landlords.
“Section 24 of the Finance Act has forced landlords to pay taxes on turnover rather than just profit, meaning they are being taxed on interest payments, which have gone up from 0.1 to 5.25 per cent. Whilst it will come as some relief to private landlords that the Bank of England kept the base interest rate frozen, rates are still high, forcing landlords to increase rents and ultimately pass on these costs to tenants. But the ranks of landlords who are staying is dwindling, with many opting to sell up and leave altogether, further reducing supply of rental properties and forcing rents up even higher.
“We need to urgently review the tax regime for private landlords and reintroduce mortgage interest relief by scrapping Section 24.
“Simply put, I suspect the Treasury would be raising considerably more revenue from the buy-to-let sector if it hadn’t forced this mass exodus of private landlords, resulting in fewer paying taxes. We need to be bringing landlords back to the market, not forcing them out, so that we have a competitive market that keeps rents low. It is encouraging to see the government apparently taking note of this by recently rejecting rent caps, but the root causes of the rental crisis are still firmly gripping the sector, and they will continue to do so until the government acts.”
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