I’m furious at having to quit as a landlord – it’s not fair

Tracey George, 52, is one of many landlords considering selling up her rental property as rising costs mean it is “barely worth” it anymore. She became an accidental landlord after inheriting a semi-detached, two-bedroom bungalow worth £230,000 in Beccles, Suffolk. Although it brings in £850 a month from its elderly tenant, she fears she has “no choice” but to sell up after tax increases announced in the Budget threaten to make renting out the home unaffordable. Shorts The changes will see income tax rates on property income rise by a total of four percentage points from April 2027, taking the basic rate to 24 per cent, the higher rate to 44 per cent and the additional rate to 49 per cent. The Government says the measure will help ensure income from property is taxed more fairly compared with earnings from work – but landlords warn the increase, combined with mortgage payments, maintenance costs and other expenses, could push them out of the market. Tracey lived in her inherited property with her partner and two children until 2015. She believes she could charge her elderly tenant around £100 more a month but does not want to “rip off” them off. Instead, she says she simply wants to cover her costs and make a little extra money as a financial buffer. But the Budget tax increase threatens to erode that buffer further. Speaking to The i Paper, Tracey said: “My rental income is £10,440 per year. I pay 9 per cent plus VAT on a letting agent because I don’t want to be called at 4am, which equates to £1,100 a year. “My other expenses average at around £2,500 a year, including insurance, maintenance, gas and electricity certificates, remortgaging etc. “I pay a buy-to-let mortgage of around £550 per month. So, after tax, excluding mortgage payments, I probably make around £5,200 per year, which I try and use towards mortgage payments of £550 a month. “But I’ve had big expenses like £2,200 on a new boiler a few years ago and £500 extra loft insulation to meet the energy ratings.” The changes from Labour will apply to property income in England, Wales and Northern Ireland, adding to the financial pressures facing landlords already contending with borrowing costs and the expense of maintaining their properties. They will yield about £35m for the Treasury in 2027-28, jumping to £575m in 2028-29 before falling to £455m by 2031-32, according to Government forecasts. For Tracey, who now lives in Norfolk and works as an emergency service trainer, the increase means her annual income from the bungalow will fall further. She estimates she will make £4,940 once the higher tax rate takes effect, a decrease of 4.8 per cent. The former teacher said she was now considering selling the property, despite her concerns about the impact on her tenant. She said: “I’m considering selling up now. I’m quite an ethical landlord and I can’t just up and leave someone without a home but I’m getting to the stage whereby it’s barely worth it. “I am so angry that small landlords like me are being squeezed out of the market. I can’t see any other way around this.” Stuart Jay, a landlord, has also recently sold one property and put another on the market. The 54-year-old, who is nearing retirement, says the latest announcements have confirmed his decision to sell his remaining four properties as his tenants move out. Mortgage payments across his properties have increased nearly three times, he told The i Paper, making property investment a much less attractive financial proposition. Stuart said: “For these reasons, where a sale is possible, I intend to sell my remaining four properties as each tenant moves out, in addition to the one already on the market.” He also questioned whether the returns from property investment justified the costs and tax liabilities involved. One house he bought for £293,500 in 2004 would now be worth between £540,000 and £585,000, he estimates. He argues that, at best, the property’s value has only kept pace with inflation. But selling would bring its own financial consequences, including a potential capital gains tax (CGT) bill. Stuart added: “I would still be taxed on the cash gain if I sold it. For a landlord who had never lived in the property, I estimate the bill would be at least £50,000, depending on income and allowable costs.” He also pointed to the additional costs associated with owning multiple properties, including stamp duty. Stuart said buying his current home cost him an extra £20,000 in stamp duty because he already owned another property, adding: “I struggle to see how that is fair. “Many landlords have already done the same, and as a result many families are finding it very hard to rent. I expect rents to rise. “Landlords with more of a financial cushion may cope, but those like me who rely on the income and have no savings will leave the market.”