Pressure on Starmer to help stop imminent rent rises 

The government must tackle buy-to-let mortgage increases as they risk further increasing rents.  

That’s the view of the National Residential Landlords Association.

Amidst ongoing conflict in the Middle East, financial advice website Moneyfacts is warning of higher rental payments for tenants as landlords face “soaring borrowing costs”. 

According to its analysis, landlords taking out a mortgage now face paying an average of £1,100 more a year than they would have at the start of March. 

The news comes as the sector faces rising costs on a number of fronts including:

• A planned increase in income tax paid on rental income from next year which the independent Office for Budget Responsibility has warned will lead to higher rents;

• Uncertainty over the costs landlords will need to pay to join the planned Private Rented Sector Ombudsman and database as outlined in the Renters’ Rights Act;

• An expectation that landlords will be required to pay up to £10,000 per property to meet new energy efficiency requirements from the Government.

The NRLA is warning that most landlords simply cannot absorb growing costs without passing them on through higher rents. 

According to HM Revenue and Customs, the average rental income declared by unincorporated landlords is £19,400 a year – significantly less than what someone earns from a full-time minimum wage salary.

Low-income renters now face the double whammy of rising rents, coupled with an ongoing freeze on housing benefit rates.

Whilst calls have been made for forms of rent control, the NRLA is warning these would simply choke off the supply of homes to rent at a time when tenant demand remains so high. 

According to Zoopla, there are an average of almost five tenants competing for every available home to rent.

The NRLA is calling on the Government to develop a plan to reduce cost pressures faced in the market. This should include:

• Scrapping next year’s income tax hike on the sector;

• Keeping the costs of joining the private rented sector Ombudsman and database as low as possible;

• Reforming the tax system to ensure it better supports proactive energy efficiency improvements to homes to rent;

• Supporting low-income tenants by unfreezing housing benefit rates.

Association chief executive Ben Beadle says: “Whilst the Government cannot be held responsible for the impact of the conflict in the Middle East, it should take action where its own policies will lead to higher rents.

“Growing taxes, uncertain costs associated with the Renters’ Rights Act and the ongoing housing benefit freeze will create the perfect storm for tenants.

“With so many people reliant on the sector for a place to call home, ministers need to recognise the real-world consequences of their decisions.

“It is simply stereotyped nonsense that every landlord can somehow absorb ever-increasing costs indefinitely. 

“They can’t, and as a result, it is tenants who will suffer most as rents continue to creep up.

“The Government needs to take action to support renters and ensure a healthy, vibrant market.”

This article is taken from Landlord Today