In the last year, there have been a growing number of landlords that are looking to leave the private rented sector (PRS), which can be attributed to an increase in taxes and regulations.
Many buy-to-let landlords have left the private rented sector recently which has resulted in a large gap in the supply of properties available to rent across the UK and is likely to increase resulting in an imbalance of supply and demand and skyrocketing rent.
Jonathan Rolande property expert from the National Association of Property Buyers (NAPB) commented said: “The grim reality is that tenants are set to face eviction, or huge rent rises because increasing numbers of landlords are looking for a solution to the latest chapter of the housing crisis that now is affecting them.
The NAPB is now saying that there should be a new set of measures saying: “The government could now look to dilute this mass sale off by increasing capital gains tax for profits on sale as a temporary measure, deterring all but the most desperate from selling up.
“Rewarding those landlords who offer longer-term letting with fixed, sensible increases with tax breaks would be a popular move too.
“Landlords are set to experience difficulties ahead. But tenants have been paying the price through the good times and the bad. It’s time to use the existing tax system tactically, to redress the balance. Without capital growth through rising house prices, buy-to-let as an investment was pointless other than for the lucky few who do not need to borrow the money to buy”.
“Even before the recent turmoil, a yield of 5% was considered good. And that’s before expenses of a managing agent, repairs, annual safety checks, redecorating between tenancies – the list goes on and on. Now with interest rates on borrowing doubling, and rates on cash in the bank increasing, an income of 5% before costs is looking dire.”
Forecasting what they think is to come they said: “Many landlords are considering their options. Some will look to move out the tenant and try to sell or sit tight, hope for the best and ratchet up the rent to make the figures work.
“Either way, many tenants face paying the price for the state we’re in. It seems especially unfair as, when times were better and interest rates fell – down to 0.1% in 2020 – how many landlords called their tenants to share the good news and reduce rents accordingly? Not many. Rents continued to rise as demand soared and supply dwindled.
“Just as we thought things couldn’t get any more unbalanced, a mass exodus of landlords will lead to higher rents, justifying increases to those staying put in their homes.”