According to the RICS (26th May 2010) rents are now rising because of a shortage of rental properties.

In their residential letting survey the surveyors found that 30% more respondents reported rising rather than falling rents.  The RICS believes that rents will carry on rising because of increasing demand for available properties.  Jeremy leaf of RICS said:

“With sellers back in the market supply has fallen back in the lettings sector.  This is good news for landlords”.

The RICS is concerned that the proposed rise in CGT will have an impact on the housing market as owners sell up to beat the deadline.  Their spokesman said “The prospect of higher CGT on the sale of property may in the near term encourage some landlords to take advantage of the current more benign tax regime.”

This could lead to a significant number of property being put up for sale, which may be good news for landlords not selling as rents would be likely to rise further due to lack of supply.

But this influx of property for sale could see the value of existing landlords portfolios fall as the numbers of property for sale outweighs buyer enquiries leading to lower sale prices – however this should only be a short term issue

It seems there are some tough choices to be made in the short term before and after the budget is announced. Let us know your thoughts:

What would be a fair tax system for capital gains?

Would applying capital gains tax on rented properties for the first 10 years only be a sensible solution and stop short term landlords entering the sector when prices are rising fast looking to make short term gains?

It is wise to protect your investments from major disasters and with our landlord insurance especially designed for landlords you can have piece of mind.