Tax Rises Hits Rented Housing Tenants

Tenants in private rented housing are bearing the brunt of the government’s tax increases on the sector. That’s the warning being issued by the Residential Landlords Association, as research shows the supply of homes to rent is drying up while demand remains high. Data released today by the Royal Institution of Chartered Surveyors warns that, while demand for rented housing from tenants “held more or less steady…for the third month running”, the number of landlord instructions “declined once again, rounding off a year in which they have fallen in all 12 months”. The RLA is blaming the government’s tax rises on the sector for the difficulties tenants now have in accessing suitable private rented housing. Read more on 24housing.

https://www.24housing.co.uk/news/tax-rises-hitting-tenants-in-rented-housing/

Buy-To-Let Landlords Struggling To Pay Mortgages

Rising numbers of landlords are struggling to pay their mortgage. For the first time on record, the number of buy-to-let homes in mortgage arrears has increased. The trend has sparked fears that thousands more landlords could fall into debt when they are hit by a raft of tax hikes next year.  Mortgage arrears among landlords rose by 6 per cent between July and September last year, according to trade body the Council of Mortgage Lenders. It reports a rise in property arrears from 4,700 to 5,000 — the first increase since records began two years ago. Repossessions of buy-to-let properties also jumped for the first time in two years, rising from 500 to 600 between July and September 2016. Read more on the Daily Mail website.

Chancellor Urged To Hit ‘Reset’ On Landlord Tax Changes

Tenants in the private rented sector face the prospect of higher rents as landlords pass on the costs of tax increases, according to the Residential Landlords Association (RLA). In a survey of almost 3,000 of its members, the organisation found that around two thirds of them were planning to increase rents because of higher taxes. The survey also found that the same proportion do not plan on purchasing any additional properties for their portfolio. Nearly a third of landlords are considering leaving the market altogether. This is despite predictions that one million new homes to rent will be needed by 2021. The majority of landlords (56%) plan to increase rents in the next 12 months to offset the impact of changes to mortgage interest relief. Read more on the RLA website.

Landlords Set To Raise Rents To Cover Higher Taxes

Almost all landlords are considering increasing rents to pay for the higher taxes they now face. In a survey the Residential Landlords Association found that 84% of private sector landlords are likely to consider increasing rents following the Chancellor’s recent tax assault on the buy-to-let sector. It also found that 78% of landlords felt that the changes would deter them from investing in more properties to rent, with half considering getting rid of properties. This is in the face of rising demand for rented housing with the agents, Savills, predicting that one million new homes to rent will be needed by 2021. Read more on the RLA website.

UK House Price Growth Edges Up, Investors Rush For Buy-To-Let

Investors are trying to beat a tax increase on buy-to-let properties in Britain, helping to push up house prices last month, according to a survey. The Royal Institution of Chartered Surveyors (RICS) said its monthly house price balance rose to +50 from +49 in November, in line with a Reuters poll of economists. Overall demand for new properties rose to a three-month high after the announcement that a higher rate of real estate purchase tax would be introduced in April for investors seeking to buy properties in order to rent them out. Read more on the Reuters website.

Death of Buy-To-Let: Landlords Wake Up To Osborne's 150pc Tax

Hundreds of thousands of landlords and their accountants are digesting the impact of George Osborne’s shock tax change unveiled in the summer Budget on July 8. The tax increase, on which there was no consultation, will be phased in from 2017 and fully implemented by 2020. The change was unexpected, and the new regime is highly complex, so investors and their tax advisers are only now fully grasping its effects. Many investors remain unaware of the change, or underestimate its severity. All higher-rate taxpayers who own buy‑to‑let properties on which there is a large mortgage will pay substantially more tax. Some current basic-rate taxpayers will also be hit, because the change will push them into the higher-rate tax bracket. Read more on the Daily Telegraph website.

Inheritance Tax Cut Would Push Up House Prices

David Cameron’s plan to lower inheritance tax and compensate for it by increasing tax on the pensions of the wealthiest was described as being likely to complicate the system and raise house prices.  The prime minister promised to raise the inheritance-tax threshold for couples to £1 million with an additional £175,000 allowance for each partner when leaving their primary residence to their heirs.  The proposal was attacked by Paul Johnson, director of the independent Institute for Fiscal Studies as likely to push more money into housing. “It is rather odd to give this special treatment to housing, given that owner-occupied housing is already extremely tax privileged,” Johnson told the BBC. “Anything that does something like this, which increases the tax privilege associated with an asset like housing will drive the price up in the long run.” Read more on the Bloomberg Business website.