9:13 AM, 6th November 2024, About 2 months ago 25
Text Size
Day by day, more landlords are waking up to the clear picture that the UK Government has no intention of allowing smaller scale private landlords to thrive—perhaps not even to survive. Rather than making a clean break, the Government has taken a ruthless, underhanded approach to dismantling the Private Rented Sector (PRS) as we know it for nearly a decade now. By piling on one costly measure after another, it has turned the rental landscape into a minefield for independent landlords, pushing them closer to financial ruin while opening the door for corporate giants to take over.
1. The Opening Shot: Section 24—A Masterstroke of Tax Warfare
When Section 24 hit, many landlords didn’t realise what it signalled. Stripping landlords of mortgage interest tax relief was more than just a policy shift—it was the opening salvo in a campaign designed to cripple small property owners. By taxing landlords on money they never actually received, Section 24 turned profitable portfolios into ticking time bombs. Corporate landlords, meanwhile, stood unscathed, sheltered by complex financial structures. It was a calculated move that foreshadowed the onslaught to come.
2. Piling On: The Stamp Duty Land Tax Surcharge
If Section 24 was the opening shot, the Stamp Duty Land Tax (SDLT) surcharge was the follow-up assault. What started as a 3% “additional property” tax has now escalated to a crippling 5% surcharge—a staggering, upfront cost that has private landlords reeling. For every additional property, the Government demands a punitive payment that makes portfolio growth nearly impossible. Yet corporate landlords escape the worst of it, buying in bulk and qualifying for non-residential SDLT rates. For private landlords, it’s a nightmare; for corporates, it’s an invitation.
3. Suffocating Layers of Regulation: Licences, EPCs, and Endless Hoops
As if tax after tax weren’t enough, the Government has tightened the regulatory noose. Selective Licensing schemes and EPC compliance requirements aren’t just costs—they’re part of a relentless effort to wear down landlords, one regulation at a time. Each new rule, each inspection, and each fee chips away at already shrinking profits, leaving private landlords struggling to stay afloat. And while small landlords scramble to keep up with the paperwork, corporate giants, with their armies of compliance officers, breeze through with ease.
4. The Final Cut: A 5% SDLT Surcharge Designed to Destroy
The Government’s message could not be more sinister: private landlords are unwelcome in the PRS. The latest 5% SDLT surcharge feels like the final stroke in a campaign of attrition. For every property, independent landlords must now pay an eye-watering upfront tax that many simply can’t afford. Corporate landlords, however, waltz around this surcharge by buying in bulk, securing properties under non-residential rates that small landlords can only dream of. It’s an iron-fisted move designed to tax private landlords into oblivion.
A Calculated Campaign to Clear Out Private Landlords
This is no accident. Piece by piece, the Government has systematically dismantled the PRS for private landlords, turning once-viable investments into financial traps. This underhanded campaign hasn’t just sidelined private landlords—it’s given corporate giants free rein to shape the rental market however they see fit. In the end, tenants pay the price with higher rents, fewer choices, and faceless corporate landlords who prioritise profits over people. It’s becoming clearer by the day that the Government’s “vision” for the PRS is a corporate-dominated market, with smaller scale private landlords wiped out entirely.
At Property118, we’ve been at the forefront of fighting against these harmful policies and advocating for a balanced, fair rental market. We believe that with the right tax reforms and sensible regulations, landlords can be encouraged to stay in the market, providing homes for tenants and ensuring rents remain affordable.
But we can’t do this without your support. If you believe in protecting the future of the UK rental market, please consider supporting Property118.
Every donation counts. Use the form below to help us fight for a fairer, more sustainable future for the UK rental market.
The UK’s rental market doesn’t have to collapse, but without urgent changes, we’re heading toward a crisis. Let’s work together to stop it before it’s too late.
Previous Article
JLL forecasts a 17% rent rise over the next five years
Ian Narbeth
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up11:15 AM, 6th November 2024, About 2 months ago
Mark, I agree with you. Sad to say it was an allegedly Conservative Government that did most of this. As a group of voters, private sector landlords are (or perhaps, now, used to be) the most conservative-leaning people in the country apart from Tory party members themselves. We were stabbed in the back and betrayed by those we thought our friends. We were vilified and our legitimate rights and interests cast aside.
The Chancellor imposing an additional 2% surcharge has added to the pain but it was the Tories who started it. Labour must be thinking: "Well if the Tories give their own supporters such a damn good kicking, we should do so as well" and why wouldn't they? Soak the "rich" and virtue-signal to your supporters that you are helping tenants, even though in reality they are making matters worse by pushing up costs.
I worry what comes next. Perhaps rent controls or the removal of any mortgage interest relief?
Jim K
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up13:09 PM, 6th November 2024, About 2 months ago
Can you please explain to me.
What the fundamental difference between points 2 and 4 is?
Thx
DPT
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up13:23 PM, 6th November 2024, About 2 months ago
You missed out one of the biggest reasons for a landlord exodus, which is the Renters Rights Bill - no s21, s8 and courts not fit for purpose, increased notice periods, no fixed term tenancies, punitive penalties for minor errors....
BillyC
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up14:11 PM, 6th November 2024, About 2 months ago
How can it be one long planned campaign by "the government" when this series of measures span many governments and both political parties?
Rob Thomas
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up15:02 PM, 6th November 2024, About 2 months ago
Thanks Mark - I think you're right, but the biggest losers are actually the tenants. Large Corporate landlords demand much higher returns. In my work for the Intermediary Mortgage Lenders Association (IMLA), I commissioned a landlord survey and average net yields were 3.8% and trading return on equity was 3.7%. No large corporate would accept these returns. So what we'll get as small landlords are forced out is higher rents for tenants sure as night follows day.
PAUL BARTLETT
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up15:44 PM, 6th November 2024, About 2 months ago
Reply to the comment left by Jim K at 06/11/2024 - 13:09
What the fundamental difference between points 2 and 4 is?
2. Conservative government betrayal
4. Labour government, those who can afford to pay...
PAUL BARTLETT
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up15:48 PM, 6th November 2024, About 2 months ago
Reply to the comment left by BillyC at 06/11/2024 - 14:11
How can it be one long planned campaign by "the government" when this series of measures span many governments and both political parties?
Because this has been a campaign by contiguous governments across both parties so the same set of MPs involved in Committee stages and voting on the bills to burn PRS LLs.
JB
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up17:05 PM, 6th November 2024, About 2 months ago
The relatively low CGT to encourage sales, falls in line with your supposition to clear out private landlords
Gary Lloyd
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up17:12 PM, 6th November 2024, About 2 months ago
It's an absolute scandal that successive Governments have and are legislating to prevent the average person from remaining or investing in a certain sector, while favoring Corporations. In a time when all you hear about is discrimination in society, it begs the question are landlords being discriminated against, and is there a case for this??
Desert Rat
Become a Member
If you login or become a member you can view this members profile, comments, posts and send them messages!
Sign Up3:33 AM, 7th November 2024, About 2 months ago
Great post Mark, and sadly, so true. The government has been doing it's best to get rid of private landlords ever since Osbourrn kicked it off with S24.
They just want to hand the PRS on a plate to the big corporate companies.
They are all about how much money they can make and will have no compassion for a tenant.
I'm sure that the laws will then be changed so they can kick them out as soon as they fall into arrears and will not hesitate to increase rents every year to the maximum.
Just looked at 1 of mine tonight. Elderly tenant moved in 10 years ago. rent then 495, rent now 495. market rate around 800 pcm.
It's all bad news for the small PRS landlord and in the future, the tenants will suffer.
Good news for the government is they have put me off buying any more houses. I refuse to pay them 10's of thousands of pounds to buy a house.
I'm going to sit quietly and watch to see if they destroy the market.
I work overseas so I have an additional 2 or 3% on top.
I have a friend in work who was looking at buying a flat for his son to live in while he is in university.
If it goes through after April next year I think he is looking at a 250k flat, so 20K stamp duty?
He has now decided not to buy.
I was looking at coming back to the UK when I retire and looking for a house for about 425k, so 37.5k in stamp duty after April?
I really don't want to move back to the UK that badly.
I think I will just keep a rental empty and use it as a base whenever I need to be back in the UK and store tools there and pay 200% council tax on the house. My local council already charge this anytime a house is empty for a day.
With the amount of money I will have to give to the government in CGT I think I will hang on to the houses that I already own (all mortgage free) and find a way of passing them along to family members to make them wait as long as possible before they get any money from them.
I no longer see me investing any more money in the UK. Anything I earn from now will be invested overseas.
I'm just praying that Rachel Reeves tenants stop paying rent and make her go through the courts to get her houses back once the RRB bill goes through and she gets rid of S21.