Nearly nine in ten people fear that the chancellor’s decision to increase taxes on landlords will lead to higher rents, according to research by Together.
Rachel Reeves announced last week’s Budget that landlords will be hit with a 2% tax increase on their rental income.
The 2% surcharge will be applied across the board, increasing property tax to 22% for taxpayers on the basic rate, 42% on the higher rate and 47% for those paying the additional rate, which will be introduced from April 2027.
Of the 2,000 people surveyed, 86% said the higher costs for landlords would lead to higher monthly payments for already struggling tenants. This rises to 94% of 61 to 79 year olds surveyed.
Chief Commercial Officer Ryan Etchells said: “In our experience, many of our landlords have chosen not to pass on the higher costs to their tenants, but instead absorb additional payments associated with making homes available to tenants, which have been caused by attacks on the private rental sector by successive governments.”
“However, landlords with properties in their own names are now faced with the tax authorities taking another big bite out of their income thanks to Reeves’ property tax hike.”
“The two percentage point increase will not only leave landlords in the lurch, but tenants as well. Our research shows that the public understands that the extra costs will fall on those who rent out their homes.
“With all the regulatory, legislative and tax burdens of late (on top of the upcoming Renters Rights Bill) this will inevitably result in higher rents from next year, and if landlords cannot make their portfolios work for them, they could be forced to sell altogether.”