According to the NLA (National Landlords Association), around 440,000 landlords who are on the basic rate will be forced into a higher bracket. All landlords face higher tax bills with the size depending on how many properties they have in their portfolio and their value.

It has found that some 31% of landlords in Central London, 30% in the East of England and 28% in the West Midlands could be hit particularly hard.

The amount by which landlords will be affected will depend on their personal circumstances, including whether or not they generate income from any other sources. Landlords’ tax liability will increase depending on their existing annual mortgage interest.

There is hope that the new chancellor Phillip Hammond may overturn this ugly, unpopular move in the budget next week.

NLA chief executive officer Richard Lambert said: “When the Government announced these changes last year, it claimed they would only hit a small proportion of higher rate tax payers. We now know that is complete tosh,’

‘The Government must look to amend these tax changes and minimise the impact on landlords and their tenants, something that could easily be achieved by applying the rules to only new loans written after April 2017,’ he pointed out.

‘Unless this happens, landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new home,’ he added.

According to RICS (Royal Institution of Chartered Surveyors), it is estimated that almost 2 million more rental homes are needed in the next 10 years to satisfy demand. 

Jeremy Blackburn, RICS Head of UK Policy, said that more needs to be done to encourage landlords rather than putting them off investing.  "The problem is expected to be exasperated next year when landlords’ right to deduct their mortgage interest from their income tax bill is removed. We urge the Prime Minister to abandon David Cameron’s previous home ownership focus and reverse April’s Stamp Duty measures in order to address short term rental supply issues," he said

We wait with bated breath at next week's announcement.

Sources: Rent Man / Property Wire