Rent is on the up, and Buy-To-Let isn't helping
Unsurprisingly, rent is going up and up, with a third of letting agents seeing rents increase between May and June, which is the biggest climber of 2015. Of course, this is going to continue, as 80% of agents surveyed have said that private rents are set to rocket in the next 5 years.
Why? Everyone is pointing fingers at the Budget, as the impact of it trickles through to the buy-to-let market.
George Osborne has made a number of promises to get tough with the tax relief enjoyed by buy-to-let landlords, however, letting agents say that tenants are going to inevitably pick up the slack. So, while private landlords can claim tax relief on monthly interest payments at up to the 45% top level of tax, as of April 2017, this will be at a basic rate of 20%.
Not only that, but from April 2016, the 'wear and tear allowance' will be axed too. Basically, there's a number of things that landlords will want to claw back, and of course, the simplest way they can do that is by putting up people's rent.
The Chancellor thinks that the changes being brought in will 'level the playing field for homebuyers and investors', but not a lot of people agree with that.
"Findings like this continue to prove that the housing crisis isn't going to disappear anytime soon and it will take a while before we see steps heading in the right direction," said David Cox, managing director of the Association of Residential Letting Agents, which compiled a report on all this.
'The impact of the Chancellor’s reductions to the amount of tax relief buy-to-let investors can claim – announced in the Budget this month – will affect the cost of renting over the coming months and is likely to mean it will take even longer to see any improvement in affordability in the private rented sector."
With private rents growing faster than the price of houses in June, and the average rent at an all-time high of £789 last month, something needs to be done, and quickly.