‘I’m a landlord – renters will pay the price for Labour’s war on landlords’
A letting agency manager has accused Rachel Reeves of waging war on landlords and warned tenants will face higher rents as a result of her attacks.
In his Autumn Budget speech on Wednesday, the chancellor announced a two percentage point increase in tax rates on landlords’ rental income as part of an overall package that sees a £26bn increase in tax increases.
Ms Reeves said the additional tax was fair because no National Insurance was charged on the property income.
But the move has been criticized by landlords who say they are already in the firing line due to a range of measures including the Tenants’ Bill of Rights, which will scrap Section 21 “no-fault” evictions from May next year.
Deshal Raja, owner of around 50 rental properties and a rental agency, said: Independent He said Ms. Reeves’ increase in tax rates would only lead to higher rents, although he was still vague on the details of the measure.
He said the move would encourage more small landlords to sell, creating monopolies in the rental market, which would mean less competition in prices and higher rents.
Meanwhile, the Tenants’ Rights Bill, which will also mean landlords could face a court case over raising rents, will mean many will now seek to raise rents to market rates before it is implemented next year, he said.
He said: “There are kind people looking after your properties and unfortunately to protect yourself you now have to put it at market price. The main issue here is not the Budget but another measure against landlords which will ultimately affect tenants.”
He added: “Normally you tax things you want people to have less of, like an alcohol tax, a cigarette tax or a gambling tax.
“But if you’re taxing people on their income, on their rental properties or things like that, you end up with landlords selling, which leads to a reduction in the property stock, so tenants have less choice in property and higher rents.
“This is essentially a war against landlords; we are an easy target, we cannot take our business abroad.”
The tax on landlords in Ms Reeves’ Budget will mean the landlord will see the basic and higher tax rate on rental property increase by 2 per cent.
This will see the basic property rate applicable in England, Wales and Northern Ireland rise to 22%, the higher rate to 42% and the additional rate to 47%.
The measure is estimated to raise an average of £500 million a year by 2028-29.
In her response to the budget, Conservative Party leader Kemi Badenoch took aim at the policy, saying: “Increasing tax on landlords will only increase rents. This will push landlords out of the market; it is tenants who will suffer.”
Rental prices across Britain have already risen to unprecedented levels, with new records set in the third quarter of this year, according to Rightmove.
The average advertised rent across England, excluding London, stands at a record £1,385 per month, up 3.1 per cent on the same period last year.
