The boss of HomeLet and Let Alliance wants landlords’ rental income to be recognised as business income rather than earned income and has slammed ‘government grandstanding’ on the issue as rental prices continue to rise across the UK.
Most letting agents have the dual challenge of delivering acceptable yields to their landlord customers and delivering sustainable profits for their businesses.
But HomeLet and Let Alliance Chief Executive Andy Halstead says: “Rent remains high, demand is strong and supply remains limited. These indicators do not look like moving significantly for the foreseeable future.
“Continued government grandstanding and indecision are making life difficult for all stakeholders in the private rental sector.”
RECOGNISED BUSINESS INCOME
And he adds: “Until landlords’ rental income is recognised as business income rather than earned income for tax purposes, the stress on individual private landlords and their tenants is likely to continue.”
The latest HomeLet Rental Index for March reveals that UK rents rose by a further +0.9% on average compared to the previous month, meaning tenants are now paying £11 more each month compared to February.
The North East and Yorkshire and the Humber witnessed the biggest month-on-month increases at +2.1% and +2% respectively – an extra £14 and £17 per month. With average monthly rental prices reaching £2,102 in Greater London, even a more modest increase of +1.5% amounts to an extra £32 per month.
PAYING MORE
Halstead adds: “Although some areas of the UK have witnessed a marginal decrease in rental prices since February, the vast majority of regions have experienced yet another price increase in the space of a month.
“That means that, on average, tenants are paying an extra £11 a month compared to February alone. That might not sound like much but when you consider that rental prices are now +7.52% higher than they were in March 2023, every subsequent monthly increase puts added pressure on tenants’ budgets. There is a very simple solution to this situation and that is to ensure landlords are taxed fairly.”
