Ahead of the Budget on 28 October, research from Pegasus Insight indicates that nearly two-thirds of landlords plan to increase rents to recover losses stemming from tax and regulatory changes. The research also suggests that tenants may encounter tighter scrutiny, with landlords reporting that these changes will influence their tenant selection.
Pegasus Insight's Landlord Trends research found that 88% of landlords are concerned about the 2% rise in income tax rates on property income held in personal names. When asked about recovering losses, 64% stated they would look to increase rents, while 83% agreed that tax and regulatory changes would lead them to be more selective about tenants.
Concerns among landlords also extend to the court system, with 91% reportedly 'very concerned' about potential backlogs for regaining possession under the Renters’ Rights Act. Mark Long, founder and director of Pegasus Insight, urged the government to ensure the court system has the capacity to cope with the new possession regime.
Separate research from Pegasus found that the typical tenant pays £917 in rent a month, an 11% increase from a year earlier. Among tenants who have lived in their property for at least a year, 46% experienced a rent increase in the past 12 months. More than a quarter of tenants surveyed anticipate rent increases as landlords pass on costs associated with complying with the Renters’ Rights Act.