fbpx

Home / General / Increasing rents for landlords

  • Jason McClean
  • 494 Views
  • 0 Comment
  • No tags

I HAVE written elsewhere about the changes the 2015 Summer Budget will have on private landlords and how they will be out of pocket thanks to increased taxation. Today I am offering a straightforward solution, the only one I think will work – and that is to increase rents.

Very few landlords will be able to sell their properties and stomach huge capital gains tax. Even fewer will be able to create a new company and sell all properties into it – the costs to do that are eye wateringly high.

I have properties as an alternative pension pot and have worked hard to buy them and operate them. I cannot afford to simply walk away or take the capital gains tax hit or start up a company. I can’t afford the mortgage redemption penalties to sell or try and consolidate the seven in to two fully owned properties either.

There are only two viable options open to me. The first isn’t that viable, it is moving abroad to avoid the tax system that only applies if you live in the UK. With a family I don’t want to do that – although if I really had to, I suppose I would.

That leaves increase the rents for my tenants as the only real solution. I expect they will not be happy about that and it means an increase of £33 per month for each of the properties. That equates to £2800 per year, the amount, plus tax, that I will be out of pocket under the new scheme.

And I doubt this will come as a surprise to the Government. Did they really expect landlords to roll over and say ‘”no worries, we’ll pay what you ask and continue to invest in properties and lose money on them?”

The Government knows that the landlords will either be forced to sell up because they cannot afford to continue or they will pass the extra costs on to the renters. Either way, with increased taxation, the Government wins. It even looks a little bit left winged as it goes after hard working landlords who are often misunderstood as being incredibly wealthy – I can attest that is not always the case.

So putting up rent prices is my only option and in line with that I will do my best to save as much on costs as possible. That means longer between refurbishments, new carpets etc. That also means I will shop for the lowest priced landlords insurance possible, but luckily I know where to get that through www.thepropertyinsurer.co.uk.

Terrible legislation that simply spreads more tax burden on landlords and renters alike, it’s a lose/lose for everyone bar the tax collector.

JASON MCCLEAN

The Property Insurer

I am a director of the Property Insurer and Property Landlord. We tell it how it really is. Yes property insurance can be boring , but our job is to make it more interesting, useful and above all save you money!

OUR INSURANCE PARTNERS