Call to support struggling landlords to remain in the PRS

Call to support struggling landlords to remain in the PRS

0:03 AM, 16th June 2023, About 11 months ago 7

Text Size

The mounting impact of tax and regulatory changes, coupled with the recent spike in buy-to-let mortgage rates, may force a growing number of private landlords out of business, one organisation warns.

The Intermediary Mortgage Lenders Association (IMLA) says the situation could have a detrimental effect on the long-term stability of the private rented sector (PRS), as there is already an imbalance between supply and demand.

It is now calling for more support for landlords who are struggling with fast-rising costs, and more investment in the sector so that landlords don’t sell up and leave.

It points to the RICS April survey which highlights that demand for rental properties has risen by 40%, while landlord instructions have fallen by 31%.

PRS serves some 4.6 million households

MLA’s executive director, Kate Davies, said: “The PRS serves some 4.6 million households — the equivalent of 11 million people — and represents approximately 19% of the housing market.

“Maintaining the health of the sector is therefore essential if we are to manage the UK’s chronic housing shortage.

“Our report highlights the tough environment that landlords currently find themselves in and, more concerningly, the outlook for the PRS and tenants if policymakers’ approach to the sector doesn’t change.”

‘Demand for rented housing is clearly high’

She continued: “Demand for rented housing is clearly high, and measures to increase tenant protections are important.

“However, the focus now needs to be on prompting increased investment in the sector and supporting landlords, whose operating costs risk becoming unaffordable.

“If we don’t get the balance right, the result will be higher rents, and lower availability of properties — both of which are bad news for tenants and landlords.”

Staggering marginal tax rate of 240%

IMLA also says that rents look set to go up because for higher rate taxpayers investing in buy-to-let properties, they now face a staggering marginal tax rate of 240%.

And as many fixed-rate mortgage deals come to an end, the substantial rate increases now facing landlords will see those costs being passed onto renters.

On top of this, the rising cost of BTL mortgages threatens the livelihoods of private landlords and if the trend continues, it could lead to a ‘decline in the overall health’ of the PRS.

Other factors undermining the PRS, IMLA highlights, include the 2015 restriction on mortgage interest tax deductions, ambiguity over the proposed EPC standards and the Renters’ Reform Bill which is going through Parliament.

Share This Article


Russell Cartner

20:29 PM, 16th June 2023, About 11 months ago

Run for the hills and sellup before the Government, Shelter, Citizens advice and every other do gooder bankrupt you. You could have 50 dogs cats, snakes elephants, gerbils, rabbits, mice , ats running round your rental. You have been warned everyone is getting out while they can


23:15 PM, 16th June 2023, About 11 months ago

She's also left out the progressive loss of child benefit: HMRC treat your rent as a gross income and adds it to your other income, with almost no deductions permitted, certainly not mortgage costs. Above £50K total "income" you start losing your child benefit.

So for example if you have an unexceptional salary of £40K and gross rent on a single property of £20K, you will lose 100% of your child benefit, even if you are actually making a loss on the rental property because of mortgage interest and other costs.

Crazy and disgusting.


11:17 AM, 17th June 2023, About 11 months ago

We should be campaigning for interest payments to be disallowed for all businesses, we need more "levelling up".

John Clark

14:34 PM, 17th June 2023, About 11 months ago

Reply to the comment left by TheMaluka at 17/06/2023 - 11:17
But your rent is an income!


15:50 PM, 17th June 2023, About 11 months ago

Reply to the comment left by John Clark at 17/06/2023 - 14:34
The thrust of my initial comment was that if all businesses were treated equally then there would be an outcry from the whole business community. As it is there are relatively few landlords complaining and their complaints are lost in the general noise of politics.


16:49 PM, 17th June 2023, About 11 months ago

Reply to the comment left by John Clark at 17/06/2023 - 14:34
I am sure I was warned some time ago by my accountant that there was a limit (think it was £3600) that could be paid into a pension by BTL as BTL is not classed as a business or trade.

Gary Dully

3:54 AM, 18th June 2023, About 11 months ago

Reply to the comment left by John Clark at 17/06/2023 - 14:34The rent is a ‘gross income’ and bears no relation to taxable income, which for all businesses should be Nett Profits, but for landlords is now (nett profits + mortgage interest ) less the lowest of 3 calculated figures made by HRMC of either 20% of mortgage interest, adjusted allowances or annual profits.
So say if you make £1 profit you get £0.20 allowance off your mortgage interest costs.
So if you pay £20,000 in mortgage interest and only make £1 profit, The government taxes you on £20,000 and knocks off £0.20 in tax, but every other business in the uk would be allowed to ignore the £20,000 paid to the banks and class it as a business expense.
But not if you’re a residential landlord, but an Airbnb landlord is allowed to be judged as a legitimate business, residential landlords are the tax slaves of the working class. But here’s the ultimate’twist’….
But landlords pay no bills, no interest, NOTHING!!
The tenant pays for EVERYTHING, we do!
Your political beliefs are very expensive for tenants aren’t they?

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now