A new report from Propertymark has revealed the damage done to the private rental sector by taxation that has hindered investment and contributed to rents soaring.
Titled ‘The Impact of Section 24 on Buy-to-Let Landlords’, the report examines the impact of Section 24, which was implemented by then chancellor George Osborne to cut the available tax relief on mortgage interest costs and end the 10% wear and tear allowance for fully furnished homes.
As a result, many landlords are shouldering higher taxes, with many only just breaking even or being placed in loss making positions. This has led to many landlords having to consider a wide range of coping strategies in response to Section 24, such as unfortunately passing increased costs onwards in the form of increased rents.
Furthermore, the report highlighted the impact of tighter maintenance budgets because of more squeezed cash flows, with direct consequences that have the potential to adversely affect tenants.
Nathan Emerson, CEO at Propertymark, said: “Section 24 is having an impact on the private rental sector, and with a budget being announced for October, Propertymark are keen to see the UK Government to consider scrapping this measure.”