Propertymark has urged the UK Government to tackle rising landlord costs immediately. The warning comes as new research suggests that landlords are spending 40% more on mortgage interest year-on-year.
It added that the average mortgage rate on outstanding landlord debt reached 3.4% in August, so it will increase once products reach the end of their fixed and reduced periods. Propertymark added that a significant factor in the lack of growth in available properties in the UK are the ‘financial implications and barriers’ in purchasing a buy-to-let property.
The report pointed to the impact of tax changes on the private rented sector including higher rates of property tax on buy-to-let properties, withdrawal of tax relief on mortgage interest, removal of 10% wear and tear allowance, maintaining Capital Gains Tax (CGT) for rented property at 18% for rented properties and 28% for higher rate taxpayers and an increase in corporation tax.
Nathan Emerson, CEO at Propertymark, said: “The UK Government must recognise that many landlords are suffering at the moment with surging mortgage costs that have been compounded by recent tax changes as well as concerns about reforms to legislation in the private rented sector and the ability for landlords to get their property back when things go wrong.”