With Local Government under pressure to meet strict budgets we could see the squeeze on Newark landlords getting even tighter.
Many large rental homes, which are let room by room to tenants, are being revalued due to being considered multiple smaller dwellings for council tax purposes, therefore treating each room as a separate dwelling!
Areas with the highest number of rental homes have been focussed on in the new plans, experts suggest councils were looking to reclassify homes in order to increase their income. Government figures show 500,000 of so-called houses of multiple occupation (HMO’s) in England could be affected by the plans.
One example is a landlord in the South of England who saw his council tax on a single property rise from £1,821 per annum to a dizzying £7,287.
Ian Fletcher, of the British Property Federation, an industry body told the Telegraph: “Local authority budgets have been squeezed for more than a decade, so they need ways of getting more money. There is only one way this will go and that is up”.
This form of tenancy arrangement often sees landlords paying bills and council tax on behalf of the tenants, before passing on a single monthly charge to renters. With possible council tax rises, landlords may have to take on the extra costs themselves but more likely they will increase the rental fee for tenants thus making the cost of living more onerous.
Nottinghamshire has a high proportion of HMO’s so I fear this form of taxation will appeal to local government officials who are struggling to meet their budgets, many councils have seen their funding drop by as much as 50% over the last decade and we can see they are getting very creative in resolving these issues.
The squeeze on Newark landlords is reaching ridiculous proportions and the blanket adoption of such proposals will simply put many out of business or seeking alternative uses for their properties.
If you are a landlord looking for options, then contact us to discuss what your options are.