If the Government does not stop imposing costly tax rises and legislation on private landlords, tenants will be left without homes warns a prominent financial services figure.

Heather Powell, Head of Property east Blick Rothenberg, says 2.81m individuals reported income from rental properties in 2022 to 2023 to HMRC, accounting for £44.7 billion of rents. The number of private landlords declaring rental income has also increased slightly from 2018 to 2023.

However, she insists that the government needs to ensure that landlords do not decide to sell up or there will be a major decrease of homes available for rent. 

She writes on her company website: “Unincorporated landlords have faced a tsunami of legislation in the last 10 years. This has included a restriction in the proportion of their mortgage interest that can be deducted when calculating their tax liability.

“The latest tier of legislation faced by landlords is the requirement to have their properties assessed in accordance with the Energy Performance Certification (EPC) regime. The current government has announced that they aim to ensure homes let have an EPC of B by 2030. While the narrative ‘where practical and affordable’ was included in the announcement many properties owned by private landlords cannot be upgraded to a B.

“Private landlords are now considering their options, especially as the forecasts of future growth in the price of homes is low. Combine this forecast with the cost of remortgaging when fixed rate loans mature, the threat of a requirement to upgrade homes for costs that will significantly exceed the increase in rents that could be charged, many may decide to sell up, especially if the expected change in capital gains rates is imposed from April 2025.”

She says tenants are unlikely to be in a position to buy and the delivery of new homes for rent has slowed due to the financial constraints faced by the registered social housing providers. Many graduates and key workers rent, and this could leave them without any housing options, which will not help the economy.

And she concludes: “Changes to taxes and other legislation need to be carefully considered to ensure that homes are available where they are needed, which means private landlords need to be encouraged to remain in the sector.”