Positive taxation for landlords who provide urgently needed homes
The government should tax landlords more positively because the UK is at risk of losing thousands of available homes over the coming year, says the Residential Landlords Association (RLA).
Even as a massive 84 per cent of landlords and agents report tenant demand rising or remaining stable, it is estimated that the private rented sector could lose as many as 133,000 homes for rent in the next 12 months, as landlords exit the sector due to tough tax and regulatory changes.
The findings of a new report from research compiled by PEARL have led the RLA to call on ministers to scrap the additional 3 per cent stamp duty charge on second homes for landlords in a bid to reduce the number who feel they are being “forced” out of the industry.
This would also include those investing in office and shop conversions, splitting large homes into self-contained properties for rent or bringing an empty home back into use.
RLA policy director David Smith said: “The Government was always mistaken to place homes to own and to rent in opposition to each other rather than seeking to supply more homes in all tenures.”
“The vast majority of landlords are individuals and small businesses, providing good housing to their tenants and supporting local economies.
“We need to support and encourage them to provide the long-term homes to rent needed.
“The government should use taxation more positively and not penalise landlords who are contributing to badly needed homes to rent.”
The report says: “These changes make it easier for those who are wealthier and cash-rich to invest in the private rented sector, over those middle income earners that may look to purchase a property with finance while also limiting the access of the sector for the more vulnerable tenants and those who can’t afford to buy or access social housing.”
Despite the government’s plan to try and increase homeownership in the UK, demand for rental homes continues to rise.
Previous research from PEARL lead to the RLA calling on the government to scrap the tax on new homes, which will boost the supply of rental property.
The RLA argues that by scrapping the 3 per cent stamp duty surcharge for those purchasing investment properties that are adding to the housing stock, growing rental demand could still be met.
As a consequence, landlords would feel more incentivised to buy good-quality, new-build properties to rent out, which could in turn improve the sector for tenants