New measures announced in the government’s Autumn Statement could bring rising rental costs, according to Liverpool property experts.
Industry insiders have questioned whether Chancellor Philip Hammond’s decision to ban letting agents from charging fees to tenants will really benefit those renting homes.
Following the Chancellor’s announcement yesterday (23 November) that landlords should instead pay the charges, which are said to have often amounted to hundreds of pounds, Bluerow Homes director Helen Griffin-Booth (pictured) says: “I am pleased to see there is a growing concern from the government to protect tenants against rogue letting agents who charge rising and unregulated fees. However, my ultimate concern is that tenants are not going to see the benefit of the ban on letting agency fees.
“Shifting these costs to landlords will likely cause them to pass them on to tenants by hiking up rents, or force them out of the private rented sector altogether thus decreasing the level of available housing stock for those who are unable to get on the property ladder.”
Paul Nicholson, managing director of Luxor Estates, also believes the ban could have this effect, and suggests it could also be intensified by the Chancellor’s tax plans.
He says: “The Chancellor in his Autumn Statement has cut corporation tax and has not repealed the increase in taxation to landlords holding properties in their personal name. Therefore, I see a lot of such buy-to-let investors either restructuring to limited company vehicles or disposing of their properties.
“The secondary effect of this confirmed tax regime along with letting fees being banned is to potentially push rents up further.”
The Autumn Statement, which also saw £1.4 billion of investment being announced for new affordable homes, was “cautious from a tax perspective” according to Julia Casimo, partner at John Kerr Chartered Accountants.
She says: “The last thing landlords need, though, would be more tax changes to deal with.
“There were no further changes to the buy-to-let restrictions on claiming mortgage interest relief, and the commitment to reducing corporation tax rates was reinforced.”
She adds: “I like the fact that a new Right to Buy scheme will be piloted for housing association tenants, and the continued support for home ownership via the Help to Buy: Equity Loan and the Help to Buy ISA should have a positive effect on the market.”