According to a survey carried out by flatshare website, Spareroom.co.uk, almost half of landlords (45%) plan on increasing their rents in 2016.
The main reason cited by landlords is the additional costs they are likely to incur following new Government legislation. This includes the reduction in mortgage interest tax relief, a potential rise in interest rates, increasing Stamp Duty charges and the cost of enforcing the Right to Rent scheme.
In addition, almost one in five landlords are planning to raise rents by more than 3%.
The results of this survey go a long way in proving that the Government has been misguided in its recent attack on private buy-to-let landlords.
The private rented sector provides a much needed service to the portion of the population who need to and want to rent as a lifestyle choice. Demand is outstripping supply and more homes are needed, not only to buy, but to rent as well.
Steve Bolton, Founder and Chairman of Platinum Property Partners, commented: "It is expected that there will be a significant decrease in new entrants into the buy-to-let market, especially from those investors who do not have the knowledge or experience to establish a robust business plan that can withstand increasing costs. At the same time, many amateur landlords may also be forced to sell.
"Limited supply of rental property and additional costs for landlords, including the reduction in mortgage tax relief, could increase rents in the short-term and make it even harder for tenants to save for a deposit in the future. Doesn't this defeat the object?
"Further investment in rental properties - such as Houses in Multiple Occupation (HMOs), which make efficient use of existing house stock and provide a quality service for tenants and a mobile workforce - should therefore be encouraged rather than prevented.
"This is why I am co-leading a legal challenge against the Government on the changes to mortgage interest tax relief."
Matt Hutchinson, Director of SpareRoom.co.uk, commented: "The roll out of Right to Rent legislation, removal of mortgage interest tax relief and changes to the wear and tear tax break from 2017, on top of Stamp Duty changes, means buy to let looks like far more of a risk than it did at the start of the year.
"The worry is that tenants will bear the brunt of these changes. And if renters end up being the ones to shoulder the burden of legislative change, something has gone very, very wrong. The private rental sector is already under immense pressure."
The next 12 months are going to be an interesting period in the housing market.
