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Accidental landlords in decline ahead of 2020 income tax changes

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  • 14/10/2019
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Accidental landlords in decline ahead of 2020 income tax changes
The proportion of homes let by so-called "accidental landlords" has fallen for the first time in five years ahead of tax changes due to come into force in April 2020.

 

These landlords accounted for 7.1 per cent of lettings in September 2019, according to the monthly Hamptons International Lettings Index.

This was a fall compared to a peak of 8.6 per cent in September 2018.

An accidental landlord is someone who has resorted to letting their home instead of selling, mainly due to a slowing sales market.

However, tax changes introduced in the 2018 Budget mean that some landlords will be liable to pay more on their income.

Every region recorded a fall in the proportion of homes let by accidental landlords, with London seeing the biggest drop.

The capital is a hotspot for accidental landlords. Of properties listed for rent in September, 10.1 per cent had been up for sale during the previous six months. This was down from a peak of 12.6 per cent in 2018.

The South East recorded the second biggest fall in proportion of homes available for rent having been up for sale. Here it was down 2.3 per cent year-on-year. The second-biggest drop was recorded in East of England, down 1.9 per cent.

The smallest falls were recorded by Scotland, down 0.4 per cent, and Wales, down 0.3 per cent.

The index showed that the average rental cost of a home in the UK rose by 1.8 per cent year-on-year to £998 a month in September. The figures are based on achieved rents on newly-let properties.

The South West recorded the strongest year-on-year rental growth, up 4.5 per cent, followed by the South East, up 3.8 per cent, and the East, higher by 2.1 per cent.

Every region recorded rent increases apart from Wales, where rents fell 1.4 per cent year-on-year in September.

Aneisha Beveridge, head of research at Hamptons International, said: “The most expensive regions and where prices have risen the most recorded the biggest fall in accidental landlords.

“This is unsurprising given that landlords in these areas will have seen the greatest gains and therefore could see their tax bills rise the most.”

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