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Tenants face rent rises over tax hike
Two thirds of landlords plan to
increase rents to cope with recent tax
increases on the private rented sector
according to a major new survey.
The survey of almost 3,000 private
sector landlords carried out by the
Residential Landlords Association (RLA)
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
and evidence showing that institutional
investors in the rental market are not
delivering the homes needed.
With the majority of landlords (56%)
planning to increase rents in the next 12
months to offset the impact of changes
to mortgage interest relief, the policy
will most negatively impact families,
with 63% of landlords reporting letting
to tenants with at least one child.
There are also likely to be cutbacks
in raising the standard of existing
properties with 58% saying the tax rises
will hit their plans for investment in
their properties.
Recent tax changes have included
restricting the payment of mortgage
interest relief to the basic rate of income
tax, an extra 3 percent stamp duty on the
purchase of homes to rent and taxing
landlords’ income and not their profit.
A majority of landlords (54%) do not
have confidence in the future of the
sector with 70%, anticipating further
government policies aimed at landlords
in the near future.
Other figures from the survey show the
sector defying some of the perceptions
it often attracts. A huge 86% of landlords
reported they had a good relationship
with their tenant with almost as many
(82%) reporting that their tenants pay
their rent on time. The current average
tenancy period is 3 years suggesting
the majority of tenants are happy and
secure in their current home.
Nearly three quarters of landlords
(73%) have not attempted to remove
tenants from their property in the last
12 months and of those who have, most
(70%) were because of rent arrears or
abuse of the tenancy and only 3% were
related to a rent increase.
The RLA is calling on the new
Chancellor to review the tax changes
made by his predecessor and get behind
the nation’s landlords and encourage
more homes to be developed for rent to
meet the demand.
Commenting on the survey, the RLA
Policy Director, David Smith, said: “These
results show how perverse recent tax
changes have been. By implementing
policy that will increase rents and choke
off the supply of homes to rent, the
Government is making it more difficult for
tenants to save for a home of their own.
“We are calling on the Chancellor to
use the Autumn Statement to hit the
reset button.” The 2016 Chancellor’s
Autumn Statement is planned for
23rd November.
From beehives to freezers - tenants on the take
New research by landlord insurer
Direct Line for Business reveals that
nearly one in three (30 per cent)
people who have rented a property in
the last five years think it is acceptable
to take items that don’t belong to
them when they move out. Some of
the more common things tenants have
removed from their rental properties
have included fridges, freezers, light
fittings, televisions and sinks.
Some of the reasons for taking items
from rented properties included
believing that the landlord wouldn’t
notice that the item was missing, taking
items by accident and forgetting that the
item was not theirs. However, the most
common excuse – given by more than a
fifth of respondents who admitted that
they had stolen items – was simply that
they wanted to take the items.
The cost to the landlord of replacing
these items adds up, with tenants
estimating that the overall value of items
they had taken from a property stands at
over £500.
Nick Breton, Head of Direct Line for
Business, said: “The range of items that
tenants feel that they can take with
them when vacating a property is quite
amazing. It isn’t even just small items
that go missing; our research found that
renters are helping themselves to beds,
sofas and cupboards once their tenancy
agreement comes to an end. These are
expensive to replace and could have a
knock-on effect for future tenants of that
property. Plus a tenant could find that
they lose their deposit.”
The research also revealed that one in
five (21 per cent) respondents who have
stolen goods said they did not complete
18 Landlord & Buy-to-Let Issue 69 • November 2016
an inventory when they moved into the
property. However, almost a quarter
(23 per cent) admitted that all of the
items they removed were listed on the
inventory but this did not deter them
from taking the items.
The research also identified some very
unusual items that were taken from rental
properties including coconuts, a beehive
and a rolling pin.
Nick Breton continued: “The research
highlights the importance of having a
thorough inventory before your property
is vacated. Building a relationship with
your tenants is a bonus and can open up
communication which could minimise
issues further down the line. If the
property is furnished then make sure you
have the right insurance in place so you’re
covered should things go missing – like
the kitchen sink!”