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Report lays bare impact of tax hikes on rental market

Over half of private landlords responding to a new survey say recent tax changes in the rental market have had a negative impact on their investment plans. That’s the finding from a new study by the London School of Economics (LSE) for the National Residential Landlords Association (NRLA). 

Based on responses from over 1,400 private landlords across England it finds that 52% say tax changes have deterred them from making further investment and acquiring more properties. Recent changes have included restricting mortgage interest relief to the basic rate of income tax, a 3% stamp duty levy on the purchase of additional homes and a decision to cut Capital Gains Tax to 18% for everything other than on gains from the sale of residential property. 

Overall, a third of respondents said the reform to mortgage interest relief was the tax change having the greatest effect on the operation of their rental business. Of this group, 39% said the change meant that they were not proceeding with planned future purchases whilst 31% said they had put plans on hold. Most worrying was the fact that 28% said they were taking steps to leave the sector altogether.

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