Rents are forecast to surge 15 per cent in the next five years after a tax squeeze on landlords slashed the number of properties on the market.
The Royal Institution of Chartered Surveyors (RICS) yesterday warned that a shift in policy by George Osborne in 2016 – intended to make more properties available for first-time buyers – will instead hit tenants in the pocket.
The former Chancellor’s cuts to mortgage interest tax relief and a hike on stamp duty on second homes pushed many buy-to-let landlords out of the market as their profits were wiped out, triggering a sharp fall in the supply of homes available for rent.
George Osborne shift in policy could result in rents increasing by 15% in the next five years, according to The Royal Institution of Chartered Surveyors
It’s predicted the policy change designed to help first time buyers will hit tenants in the pocket
However, landlords who remain say they are planning to raise rents as tenants scramble to secure a home.
A survey of property professionals by RICS suggests rents will climb by 15 per cent over the next five years because of the tax changes. Geoff White of RICS said: ‘The situation in the private rented sector gives great cause for concern as supply continues to drop. New policy on taxes and stamp duty have made it so difficult for landlords, at a time when the UK needs more homes to rent, that many continue to exit the market.’
David Cox, chief executive of letting agents’ trade body Arla Propertymark, added: ‘This combination has unsurprisingly started pushing landlords out of the market. We predicted this, and we warned Government. Our fears are now being realised and renters are suffering.’