More than a million landlords plan to hike their rents next year to beat an imminent tax crackdown, research has found.
From April next year, buy-to-let investors will see the tax relief on their mortgage interest cut from a maximum 45 per cent to just 20 per cent.
The changes will be phased in over the next five years and threaten to make buy-to-let properties less profitable for those with a mortgage.
In the first survey of its kind, around two thirds of the landlords said they are set to put up rents.
A third said they’ll hike annual rents by around £300 next year. A further third say they’ll increase rents by around £600 — and 7 per cent plan to charge an extra £1,200, says the Residential Landlords Association.
There are around two million landlords in Britain, so the figures suggest at least 1.3 million will raise rents.
David Smith, of the RLA, says: ‘We warned the Government this would happen if it cut interest rate tax relief.’
This month the Administrative Court refused permission to proceed with a full judicial review hearing of the legislation in a case led by Cherie Blair, CBE and QC of Omnia Strategy LLP, representing co-claimants Steve Bolton and Chris Cooper who had hoped to challenge the measures in court.