Plea for government to help ease growing landlord costs

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Plea for government to help ease growing landlord costs

The government is being urged to intervene and help landlords as buy to let borrowing costs rise, adding fresh pressure to rents and landlord finances.

The National Residential Landlords Association points to an analysis from Moneyfactscompare.co.uk which found that landlords are paying an average £1,100 more a year than in January.

That’s down to market shifts linked to conflict in the Middle East feeding through into costs.

At the same time, landlords are contending with a series of further financial demands.

Those include a planned increase in income tax on rent from next year is expected to feed directly into higher rents, according to the Office for Budget Responsibility.

Landlords need help

The NRLA’s chief executive, Ben Beadle, said: “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.”

He added: “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.”

Other costs to absorb

The NRLA also says that there is also uncertainty around the cost of joining the proposed Private Rented Sector Ombudsman and database under the Renters’ Rights Act.

Also, landlords may need to spend up to £10,000 per property to meet new energy efficiency requirements.

The organisation says most landlords cannot absorb these increases without raising rents.

It points to HM Revenue and Customs data shows average declared rent income for unincorporated landlords stands at £19,400 a year.

That figure sits below earnings from a full-time minimum wage role, limiting scope to offset higher costs.

Solutions for government

There’s also an issue for tenants on lower incomes who are facing rising rents while housing benefit rates remain frozen.

Calls for rent controls have been made, yet the NRLA said such measures would restrict supply.

Zoopla reports almost five tenants competing for each available home to rent.

The association is calling for changes to reduce cost pressures, including scrapping the planned tax rise and keeping new regulatory costs as low as possible.

It also wants reform of the tax system to support energy efficiency improvements and for the unfreezing of housing benefit rates.

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