A study has revealed that landlords are increasing rent prices as a result of the recent introduction of buy-to-let tax regulations.
The estate agent, Your Move has analysed rental prices on around 20,000 properties and found that the average rent in England and Wales has risen by 3.1% in the past year.
With the average rental price now £874, it’s thought that the increase can be largely attributed to recent tax changes including the mortgage interest relief and 3% stamp duty land tax surcharge.
Tax changes have also restricted the supply of new properties on the market. With a fall in housing stock levels, it means there has been more demand for properties so landlords have been able to push up rent prices. Please remember that any income received from rental properties is taxable – if you’re unsure about whether or not you owe HMRC money, please contact us about the accountancy services we offer.
Every region apart from the South West saw rental prices increase in the year to July 2017, with rents in the South West down 2.2% to an average of £667 per month.
Wales saw the biggest rise in rent over the same period, with prices up 4.3% to £595 per month.
Other areas to experience average monthly rental increases of more than 3% in the past 12 months include:
- The South East – up 3.6% to £884
- The North West – up 3.1% to £630.
Speaking about the implications of the changes to buy-to-let tax regulations, director of Your Move, Richard Waind commented:
“We are now starting to see the real impact of the stamp duty revision, plus the additional tax changes which have hit landlords hard. The outcome has seen a decline in the number of rental properties on the market and this has had the effect of pushing up prices for tenants.”