Across many personal finance and property websites, landlords are being attacked for increasing rents and creating, to quote the BBC a “renting frenzy”.
Landlords are selling up to release capital as they retire, and a rental property shortage is now growing.
First time buyers are putting off buying homes due to higher interest rates creating greater rental demand.
Demand is high and availability is low and many landlords are being criticised for increasing rents. We refute this argument and blame the government.
The owners of Roberts Clark and this website, Ashley and Joanne are also landlords. We own 5 investment properties that we have worked hard for. We have currently not increased rents but our hands are tied by new laws as well as the current economic climate.
Pressure on Landlords
- Landlords were required to accept lower rents or rental ‘holidays’ from tenants when in covid-19 lockdown with evictions banned. Many are still recovering from this.
- Income tax relief for landlords has been reduced on mortgage interest payments meaning more tax for the same income.
- Mortgage interest rates have increased dramatically, resulting in all remortgages and new interest payments on rental properties more than doubling meaning huge expenses that will ultimately be partially passed on to tenants.
- Capital gains tax on property gains is 28% and 18% whereas capital gains tax on other assets is just 20% and 10%.
- Capital gains tax annual allowance has been reduced from £12,300 last year to £6,000 this year and £3,000 next year meaning many landlords have already sold off.
- New Energy Performance Certificate (EPC) for residential lettings must be a minimum C for new tenants from 2025 and existing tenancies from 2028. Landlords are either selling off properties of paying huge sums, in £000s to make rental properties more efficient. These costs will no doubt be reflected in higher rents.
- Many social housing firms are selling offer inefficient homes to avoid upgrading insulation, heating systems etc, meaning less properties available.
- Private households do not have to comply with these same EPC rules nor do Holiday Lets, so many landlords in popular areas are moving away from residential letting to holiday letting resulting in less rental property availability.
- New fire regulations after Grenfell, mean that many landlords with flats and apartments are being forced to pay for fire safety improvements including new fire doors, frames, alarm systems, cladding and more. These costs will no doubt be passed on in rent increases.
Stop blaming private landlords only. There will be unscrupulous landlords out there taking advantage but there are also hard working, good ones who have ploughed their life savings into investment property for a stable retirement income and cannot afford to comply with all new laws without increasing rents or cannot mortgage payments and higher tax bills without increasing rents.
It is successive governments and local authorities that have happily collected taxes from all hard-working people including many landlords but have failed to build new social housing given population increases or failed to acquire and convert empty, old or redundant warehouse, factory and office units into residential accommodation.