27th
Jul 2015
According to a recent survey that polled landlords about the budget and its effects, 65% are seriously considering raising rents because of mortgage interest relief will be reduced by the government.
The Government of course is taking the stance that the previously announced cuts should have no ill determined affect upon landlords and therefore they do not envisage a rise in rents.
If you have missed the previous story or have been away out of the country, the chancellor announced in his summer budget that the mortgage interest relief would be reduced to the basic rate of income tax.
Another helping hand from the 'powers that be’ also dropped the bombshell, that the automatic allowance for ‘wear and tear’ will no longer be applicable, and will be just consigned to necessary and proven improvements – accompanied by receipts.
George Osborne firmly believes that landlords have better tax incentives than existing or new homeowners. However the Institute of Fiscal Studies and the government’s think tank, Policy Exchange, are not in agreement with the Tories’ summation, as landlords have to pay income tax on rent as well as capital gains.
Richard Merrick of PIMS, said: “It is hardly surprising that a majority of landlords are considering raising their rents because of the budget. We cannot understand why the government is introducing these measures; surely they should be supporting the sector in providing ‘homes’ because of the housing crisis?
“The economic situation caused lower wages to be introduced due to supply vs demand, and the drop in household income has caused the necessity of the private rented sector. Fewer and fewer people are able to enter the property ladder.”
“Landlords should be treated as any business, they are not homeowners.”
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