Fergus Wilson (left) told the press that when he let a three-bedroom mid-terrace home in Maidstone, Kent, last weekend, he managed to increase the rent from £900 a month to £1,200, thanks to a high demand from tenants, fuelled largely by an influx of eastern European migrants.
He will now be seeking similar rent hikes across his residential property portfolio.
He commented, “I will not be asking them to leave but will serve them with a Section 13 Notice to increase the rent so that they have the opportunity to move to another landlord should they wish. That is if they can find a house of the same quality and a price they can afford. By the time they have paid out fees etc, some will take the view there is not much in it.”
Wilson said that he was increasing rents to ensure that his property empire remains profitable in light of the recent tax relief changes announced by Chancellor George Osborne, who has made it his goal to create what he described as a “level playing field” between prospective landlords and those acquiring properties to live in.
Osborne announced in the Summer Budget that tax relief will be restricted for wealthier landlords, down from between 40 per cent and 45 per cent currently to 20 per cent for all individuals by April 2020. This, along with the decision to abolish the Wear and Tear allowance for landlords, could see profits vanish almost entirely for many landlords.
Some housing experts believe that the tax changes may discourage new investors from entering the buy-to-let sector, while others may now decide to sell up providing more much needed housing stock on the market. But others feel that many landlords, like Wilson, will simply charge more rent.
According to recent research carried out by the Residential Landlords Association (RLA), 65 per cent of landlords are considering increasing rents following the Budget announcement.
Alan Ward, Chairman of the RLA, said, “Rather than supporting the sector to provide the vital homes needed to support a flexible labour market, the Finance Bill will choke off supply and drive up rents.”
“The belief that landlords should be compared to home owners is like comparing apples with pears. The two are vastly different. It’s time the Treasury recognised residential landlords as a business.” He added.