Mortgage brokers have warned that the Government’s new Renters’ Rights Act and proposed property tax reforms could drive landlords out of the market and push rents higher.
According to Family Building Society’s latest Business Outlook Survey, which tracks broker sentiment every six months, four in five brokers believe the Renters’ Rights Act – which gained Royal Assent yesterday – will have a negative impact on both landlords and tenants.
Respondents said the legislation would accelerate landlords’ exit from the market, reducing rental supply and increasing rents.
One broker described the changes as “really awful”, warning that “it will drive more landlords out of the market and will lead to fewer buy-to-let properties available to rent.”
In addition, 69% of brokers said the property tax reforms expected to be announced in the 26 November Budget would harm the housing market.
Extending National Insurance (NI) to landlords’ rental income and replacing stamp duty with an annual property tax were singled out as particularly damaging.
One broker said such measures could have “a massive impact on the housing market which could take a dive.”
Brokers were also deeply sceptical about the Government’s target of building 1.5 million new homes by 2029, with 94% saying it would not be achieved.
Alistair Nimmo, director of Marketing at Family Building Society, said: “Our survey, tracking the sentiments and views of brokers on the mortgage and housing market in general, which we have been running since 2023, reveals the depth of feeling to the government’s tinkering with property tax and proposed legislation.
“Brokers are also nervous of the continued speculation about the Budget next month and the potential effect on the housing market.
“The survey highlights that First Time Buyers remain the most active mortgage seekers although brokers report that the desire for younger people to get on the property ladder is down from 76 per cent reported April to 64 per cent this time.
“75 per cent of brokers recorded an increase in applications for two rather than five-year fixed deals, reflecting uncertainty in future interest rates.”
