Landlords can’t absorb growing costs without passing them on through higher rents, the NRLA has warned.

New Paragon Bank research reveals that 35% of landlords expect the Renters’ Rights Act to impact them financially and are planning for the costs of compliance to remain profitable.

More than half (53%) will consider increasing rent, 37% plan to review pricing more frequently and 18% will look to make cost savings across their portfolios, potentially changing the level or frequency of maintenance and white goods replacement.

Average

According to HM Revenue and Customs, the average rental income declared by unincorporated landlords is £19,400 a year – significantly less than what someone earns from a full-time minimum wage salary.

Following news that landlords taking out a mortgage now face paying an average of £1,100 more a year than they would have at the start of March, the NRLA says the government must develop a plan to reduce cost pressures faced in the market.

Scrap

It wants the government to scrap next year’s income tax hike, to keep the costs of joining the private rented sector Ombudsman and database as low as possible and to reform the tax system to ensure it better supports proactive energy efficiency improvements to rental homes. The NRLA is also calling on it to unfreeze housing benefit rates.

Chief executive Ben Beadle says growing taxes, uncertain costs associated with the Renters’ Rights Act and the ongoing housing benefit freeze will create the perfect storm for tenants.

“With so many people reliant on the sector for a place to call home, ministers need to recognise the real-world consequences of their decisions,” adds Beadle. “It is simply stereotyped nonsense that every landlord can somehow absorb ever-increasing costs indefinitely. They can’t, and as a result, it is tenants who will suffer most as rents continue to creep up.”

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