Greedy Labour's Tenant Tax

As the Renter Reform Bill edges towards law, the effect of the changes are already having an effect on tenants and driving up rents.  Landlords have had enough and are leaving the sector in droves.

25% of private landlords sold at least one property in 2024 and 2025 forecasts are that 40% of private landlords are expected to sell at least 1 property in 2025 (I already have). 

This is resulting in massive drop in supply of available rental properties.  Although Labour is promising a massive increase in social house building with 1.5M homes, after 1 year they have built 59,680 houses. The 1.5M million homes is looking like unicorn dreams in this parliamentary term.

In December 2024, there were 4.2million tenant deposits registered by 1.28 million landlords (down from 5.1million in 2021 - the conservatives have been doing their bit to kill-off landlords).

So if 40% of landlords sell off 1 property in 2025 that means there will be 512,000 less rental properties. So much for the 59,680 new Labour council houses - it's not going to balance the equation.  Almost certainly homelessness will rise. 

2024 saw homelessness rise to 8.1 people per 100,000.  So far statistics show a 38% rise in homelessness in 2025.  When the equation doesn't balance then people fall off the end and become homeless.

So there is definitely a supply and demand problem.  With immigration running at 948,000 net increase in 2024 and the government's own forecast for 2025 being 431,000 new immigrants, housing is in scarce supply.

Classic supply and demand economics says that when there is more demand than there is supply that prices will rise.  Unsurprisingly private rents have increased by 9% in the last 12 months.  Labour will say this is greedy landlords that are cashing in.  Well greedy council and social housing providers must also be "cashing-in" because council rents have also increased by an inflation busting 7.7% in the last 12 months.  It seems that Socialist based housing is not immune to supply and demand...

So who is winning from this 9% increase in rents? 

Tenants are clearly losing - their rent has gone up by 9%

Unfortunately if the landlord has a mortgage of more than 50% of the property value then almost certainly they are not gaining from the 9% increase. The real winners are the banks and the tax man. Section 24 means that interest relief is not really allowable so Landlords are taxed on the gross income not the gross profit.  

Assuming a monthly rent of £1,000 per month, a 9% increase (£90 per month) will result in the tax man getting £36 of the £90. So you may say OK the landlord is making £54 profit then.

Not true.  Landlord Insurance costs have increased by 10 - 25% in the last year.  Labour is introducing lots more controls eg selective licencing. Greedy Starmer has removed the rules that Councils had to follow and they can introduce Selective Licence taxes to boost their coffers.  This is little more than a tax. The typical annual fee for selective licencing is £900 for 3 years so an additional tax of £300 per year. Who ultimately pays this tax?  The tenant. In the end the Landlord is unlikely to see anything from the 9% increase.

Starmer also is introducing the Landlord database - doubtless it will not be free to register on the database.

I would be surprised if the Landlord received more than £20 of the £90 - the rest goes to the tax man / government.

Red Miliband is also forcing private landlords to increase the energy efficiency to C whilst social and council properties are allowed to have EPC energy efficiency levels which would be illegal if it was a private landlord.  Double standards.  Sign my petition to make councils comply with the same energy standards as private landlords to stop these double standards.

 It should be pointed out that the wonderful Labour government has allowed the energy price cap to increase by over £300 since they have been in office whilst Landlords would have to spend £15,000 in order to save £240 on tenant energy bills.  Again the tenants are the loser from Labour's increases.  Obviously Landlords are not going to spend £15,000 for nothing - some cost recovery is expected so rents will need to rise to accomodate this spend. A double whammy for tenants - rising energy costs and rising rents as a result of forced investment.  Personally I would rather reduce by tenants rent by £240 than spend the £15,000 however that's impossible to do. You must follow Starmer's rules.