Government urged to reconsider BTL tax changes to tackle housing crisis
The Residential Landlords Association (RLA) is calling on the government to reconsider the way landlords are taxed in a bid to tackle the crisis in housing supply.
With more than a quarter of UK households predicted to be privately rented by 2025, rental demand continues to grow.
While that’s great news for existing landlords, the latest figures also reveal an alarming decline in the overall number of residential properties to rent.
The number of homes for private rent in England declined by 46,000 between March 2016 and March 2017, as buy-to-let investors were deterred by the 3 per cent stamp duty surcharge, combined with the government’s decision to phase out mortgage interest relief – otherwise known as Section 24.
Prime Minister, Theresa May argued that “rents come down” when “supply goes up” during the launch of the new National Planning Policy Framework, but supply continues to be one of the biggest issues for the private rented sector.
It means that rents are likely to rise in the near future, a situation only exacerbated by the tenant fee ban expected to hit letting agents and landlords next year.
That’s bad news for tenants, but could also be bad news for landlords in the longer term.
The latest figures from ARLA Propertymark reveal that 23 per cent of tenants saw their rents increase in March, which is the highest level seen since September 2017 when 27 per cent of landlords put rent costs up for tenants.
The RLA’s policy director, David Smith, said: “The figures show that tax hikes on the sector are choking off supply and making it difficult for prospective tenants, many of whom cannot afford to buy a home of their own, to access the homes to rent they need.
“At the same time that the Ministry of Housing has published its corporate plan in which it pledges to support the delivery of one million homes by 2020, this is hardly an auspicious start.
“Delivering homes just for those who can afford to buy is not a policy which meets the needs of many less fortunate households in the UK.
“With corporate investors still accounting for only two per cent of the private rental market, it is time to develop pro-growth taxation that supports the majority of landlords who are individuals or small businesses to invest in the new homes to rent we desperately need.”