'Chaotic' council tax changes may lead to rent rises
Published by Max Salsbury for 24dash.com in Housing and also in Central Government
The government's council tax changes could lead to a rise in rents, a lettings agent had warned.
Ajay Jagota, of KIS Lettings, fears the “chaotic and confusing” changes will create a “postcode lottery which seemingly encourages landlords to raise rents or lower standards”.
From April 1, councils have had the discretion to charge full council tax on empty properties – including properties which have until now received discounts and exemptions, properties waiting for new tenants and properties undergoing building or renovation work.
The changes mean council tax regulations now differ from council to council, with authorities such as Newcastle, North Tyneside and South Tyneside allowing landlords grace periods to fill empty properties, but others such as Sunderland charging them the full rate from day one.
Mr Jagota said: “More than half of North East landlords have experienced empty properties in the last three months, and the risk is that their costs will rise, costs which may have to be passed on to tenants, meaning rents may rise as a result.
“In extreme cases, landlords may feel compelled to dispose of properties in council areas where they find the council tax regimes uncompetitive or unhelpful – lowering the local available housing stock at the exact time when local authorities are relying on the private rented sector to pick up the slack of the impact of changes like the bedroom tax.
“What is more, this system seems to actively encourage landlords to fill their properties at all costs by penalising them for carrying out home improvements and focusing on securing stable long-term tenancies – I thought the government wanted to encourage responsible landlords!
“I would advise landlords to talk this matter through thoroughly with their agents as it is now more crucial than ever to get soon-to-be-vacant properties marketed as soon as possible, and about the potential steps they can take to minimise their exposure – for example by declassifying their properties.”