24% of landlords will be putting up rents

24% of landlords will be putting up rents

The changes to mortgage tax relief were announced a while ago but now the time is nigh for them to be implemented, landlords up and down the country have been putting their contingency plans in place.

According to the latest Private Rented Sector Trends report by Paragon Mortgages, 24% of the landlords they surveyed said they would be putting up their rents to combat the changes. 16% said they would actually be selling some of their properties and 21% said they would be holding onto their existing portfolio but not adding to it.

Time elapsed since the announcement has enabled landlords to come to terms with the changes and the impact on their pockets and out of those surveyed, 20% felt more optimistic than they did three months ago.

Managing Director of Paragon Mortgages said, “We’ve reached a critical time for landlords looking to plan ahead. It’s clear that landlords’ understanding of the changes has improved and that more landlords are developing a clear strategy to address the impact of the changes. Despite increasing optimism, we must remain cautious. The changes have not started to be implemented yet and the full impact will not be felt for many years. Whilst it is predictable that landlords will seek to increase rents in response to higher costs this clearly will not be good news for tenants, particularly those that are already struggling to save for a deposit.”

Despite the prospect of rents rising, tenant demand remains high with 94% of landlords who responded to the survey stating that the rental market was stable or growing.

There is another budget coming shortly on March 8th and landlords have been lobbying their MPs and strongly expressing their concerns about the cuts to mortgage tax relief. There are widespread calls for the government to review their stance in this area so it will be interesting to see if landlords get the positive response they’re clamouring for.