Rent and mortgage costs surge as landlords brace for potential tax hike

Rent and mortgage costs have surged after hitting a 17-month low, according to a new report.

Barclays Property Insight report reveals a 4.5% year-on-year rise in rent and mortgage costs, a sharp increase from the modest 1.1% growth seen in August.

The news comes before the upcoming budget at the end of October, with many landlords worried about the rumoured increase in capital gains tax.

Interest rate decision in November will be “one to watch”

Barclays reports that consumer confidence in household finances remained stable month-on-month at 70%, even amid expected fluctuations in housing and energy costs.

The percentage of consumers lacking confidence in their ability to meet rent and mortgage payments stayed consistent at 15%.

The Bank of England held interest rates in September at 5% after cutting interest rates in August for the first time in five years.

Mark Arnold, head of mortgages and savings at Barclays, says the next interest rate decision in November will be “one to watch” as the budget things may introduce new measures that impact the housing market.

He said: “While consumer costs continue to be impacted by the ongoing volatility in the housing market, we are still encouraged by the long-term downward trajectory of rent and mortgage spending.

“The next MPC decision in November will certainly be one to watch, although we recognise that there are multiple complex issues impacting the housing market beyond just interest rates, including supply and demand pressures. I hope we can work alongside government and industry to tackle some of these over the coming months.”

Rumours of a capital gains tax hike to 39%

The Guardian reports that capital gains tax may rise to 39% in the upcoming budget.

Treasury officials told the Guardian “they do not speculate before the budget” but despite the rumours, many landlords have decided to sell up.

According to TwentyCi, the number of available rental properties has reached a record low, with only 276,000 listings in July 2024 across the UK. This represents a significant decrease of over 25% compared to the 369,000 properties available in July 2019.