Propertymark has called for the government to review all taxes impacting private landlords to help tackle the rental cost crisis.
Knight Frank found that a combination of factors such as a shortage of rental supply, a fall in first-time buyers due to high mortgage rates and other economic factors, caused rental costs to increase to a record-high of 5.5% in the year to August.
Furthermore, Rightmove found that the average billed rent for a home in Britain (outside London) leaped to a record £1,278 per month between July and September.
Nathan Emerson, chief executive at Propertymark, said: “The crux of the cost of renting crisis is that demand is far outstripping supply – Propertymark member figures in August show that the number of tenants registering for a property is almost 32% up when compared to last year.
“Alongside building more homes, government must recognise the impact of the current tax regime on the availability of homes in the private rented sector and ultimately the costs passed on to tenants.
“What we need is a full review of all taxes impacting private landlords in order to introduce pro-growth policies that can increase supply and bring down the cost of renting for tenants.”
Taxes affecting landlords include stamp duty, which incurs a 3% surcharge for investment purchases.
Landlords lost their ability to claim tax relief against mortgage costs in 2020, which was replaced by a 20% tax credit, meaning they are largely taxed on thier income rather than their income.