Prime Minister Sir Keir Starmer’s recent comments have stirred the rental market, hinting at potential tax rises for landlords.
- Starmer defined ‘working people’ as those earning from monthly wages, excluding income from assets and property.
- The possibility of increased income tax has raised alarms among landlords, many of whom are considering selling.
- A significant share of landlords are already planning to exit the market due to financial pressures.
- Industry leaders urge the government to address the critical shortage of rental properties amid growing demand.
In a statement made at the Commonwealth leaders’ summit, Prime Minister Sir Keir Starmer outlined his definition of ‘working people’, suggesting that those earning from assets and property do not fall under this category. This declaration has sparked concern among landlords about potential income tax increases, as it may signal impending financial implications for those relying on rental income.
Starmer stated, “I would define a working person as somebody who goes out and earns their living usually paid in a monthly cheque.” He emphasised that his focus as Prime Minister remains on individuals who work hard and are unable to easily overcome financial challenges.
Bea Montoya, Chief Operating Officer of Simply Business, expressed the growing anxiety among landlords following Starmer’s remarks. Many landlords fear that the failure to exclude them from potential tax hikes will exacerbate their financial burdens. This sentiment is particularly worrying given that over one-third of landlords are already contemplating selling their properties within the next year.
The looming tax increases have been cited as a key motivator for landlords’ decisions to exit the rental market. Reports indicate that 43% of those planning to sell attribute their decision to anticipated tax hikes. This anticipated shift poses a significant risk to the availability of rental housing in an already strained market.
Ben Beadle, Chief Executive of the National Residential Landlords Association, countered Starmer’s implications, highlighting that many landlords are indeed part of the working populace. Official statistics support his assertion, showing that 30% of landlords are employed full-time and another 10% part-time. Furthermore, 28% are self-employed, while 35% are retired and cautious about their reliance on rental income for their livelihood.
Beadle argued against mischaracterisations of landlords, urging the government to refocus efforts on addressing the shortage of homes available for rent. He underscored the pressing need to meet the surging demand for rental properties, which continues to outstrip supply.
The evolving tax landscape promises to play a pivotal role in shaping the future of the UK’s rental market.
