It’s been reported this week that a million landlords will raise rents in order to beat the government’s tax crackdown next year.
From April 2016 the buy-to-let investors will see the tax relief on their mortgage interest cut from a maximum 45 per cent to just 20 per cent. Over the next 5 years the tax changes will be implemented and will make properties less profitable for those investors with a mortgage.
Research has found that more than a million landlords plan to raise their rents next year. Around two thirds of the landlords who took part in the survey said they are going to increase rents next year.
David Smith, of the RLA, says: ‘We warned the Government this would happen if it cut interest rate tax relief.’
Last week in a case led by Cherie Blair, CBE the Administrative Court refused permission to proceed with a full judicial review hearing of the legislation. Cherie Blair was representing co-claimants Steve Bolton and Chris Cooper who had hoped to challenge the measures in court. You can read more about this in our previous article.
There are around two million landlords in Britain, so the figures suggest at least 1.3 million will raise rents.