Tenants 'concerned by rising rents due to tax changes'

by Gary Whittaker

A significant number of tenants are concerned about a potential increase in rents due to the tax changes announced by the chancellor in the Summer Budget.

George Osborne revealed mortgage tax relief for PRS landlords is to be scrapped and it has been widely reported that tenants may end up being charged more to compensate for this.

A study carried out by comparison website Makeitcheaper found 38 per cent of renters are uncertain about how this change will impact them, while 35 per cent claimed they would move to another property if their rent was raised.

Only 20 per cent of respondents said they would be willing to pay more to stay in their current home. One in ten claimed they would look to move into the social housing sector, while 17 per cent would have increased motivation to try and buy their own property.

Around 80 per cent of tenants said they would not be able to afford a rent increase, while close to half said they believe greater rent control measures need to be introduced.

A survey carried out by Rentify last month found 56 per cent of landlords plan to raise rents in light of the Summer Budget. 

The company's chief executive George Spence stated: "The chancellor’s cutting of the mortgage interest relief remains a very unwelcome decision and one that could irreparably damage the approach of many buy-to-let landlords and quality of living for their tenants."

He also suggested there could be a knock-on effect for letting agents, as the money landlords save through the current tax break is often put towards costs such as agency fees.

The Residential Landlords Association echoed these sentiments, suggesting the government has underestimated the impact the changes will have on the PRS.

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06-August-15Property Management