If the tax goes up, will the rent go up as well? It seems like it for the UK landlords. According to propertywire.com, "More than half of UK landlords who took part in a new poll said that they are likely to increase their tenants' rents as a direct result to tax changed announced in the Mini Budget."
Once the tax cuts are put in place, it will affect the overall renters in the U.K. It will also affect the investments by the landlords. According to propertywire.com, "These statistics are a stark reminder that if landlords aren't incentivized to be landlords then they will just stop buying."
If that happens, the rent hike will increase even more. It will lead to many adverse outcomes. There is a possibility of unprecedented results which will affect the standard of living by the renters. Statistics have shown that 56% said they would need to respond with rent hiked to Chancellor George Osborne's cutting of mortgage interest relief from 45% to 20% as stated in a report by propertywire.com. Statistics have also revealed that the landlords will not expand their properties if the cuts continue to rise. Some are even opting to sell their properties to avoid the tax cuts altogether.
Renting and maintaining the high costs of rent have bothered the UK residents for a long time and with the upcoming rent hike. The challenge rises even more. According to a previous report by theguardian.com, "Nine million people now pay rent to private landlords in the UK after the reckless expansion of the buy-to-let market, with too many stuck in expensive, substandard homes and desperately insecure tenancies."
George Spencer, chief executive officer of Rentify stated that, "The Chancellor's cutting of the mortgage interest relief remains a very unwelcome decision and one that could irreparably damage the approach of many buy to let landlords and quality of living for their tenants."
The horizon looks bleak for both the renters and the landlords in the coming days. If the decision is not made regarding the tax cuts, renting might shift to a different direction in the UK.
