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A young couple living in Hull have written to their local MP asking for help after their landlord has told them he may have to put the rent up by 78% to cover his tax losses by 2020. Not surprisingly, the couple, who have a six-week old baby, say they would not be able to afford such a rent hike.
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Unfortunately, the landlord, who owns 165 properties in Hull, says he will have no choice.
Mortgage Relief Phasing Out
Government tax changes for landlords come into effect at the beginning of April. Over the next five years, mortgage interest tax relief will be slowly phased out. Landlords with mortgages, i.e. most landlords with larger portfolios, will no longer be able to use mortgage interest to offset their tax bills.
Many critics say this measure will make property letting unprofitable, but the government believes it will level the playing field between landlords and first time buyers.
Tenants Will Lose out as Landlords Sell up
Danny Gough from the Humber Landlords Association has told the Hull Daily Mail that local landlords will have no choice but to sell up or raise rents to over their extra costs. Either way, tenants will lose out.
The Treasury is unrepentant. “By restricting the mortgage reliefs available to landlords we have addressed the unfair advantage they enjoyed over others trying to buy a house and we do not expect there to be an effect on rents.”
