Tenants could struggle to find a home as landlords sell up as a result of the Covid-19 crisis. The National Residential Landlords Association (NRLA) has warned a supply crisis is looming without a financial package to help landlords and tenants.
Here NRLA Chief Executive Ben Beadle says Chancellor Rishi Sunak must introduce positive tax changes in next month’s budget to allow the sector to get back on its feet.
It has been a tough year for us all, but as the vaccine rollout continues and the Government prepares to reopen the country, we look at the positive steps that we believe could make a huge difference to the landlords providing vital homes to let – and the tenants living in them.
The NRLA has used its submission to Government ahead of the budget to call for a comprehensive package of financial support for landlords and tenants to avoid a rental arrears crisis.
We will continue to lobby for this and to make the case for this to help landlords and tenants through this crisis.
Landlords have gone above and beyond to support tenants through the Covid-19 crisis, but this is not sustainable long-term.
Urgent package of support needed
A package of interest-free hardship loans and grants is needed as a matter of urgency. To expect landlords and tenants simply to muddle through is not acceptable.
Research shows 840,000 private renters in England and Wales have built arrears since lockdown measures started in March last year and we need to help these people continue to pay their rent and stay in their homes.
If the pandemic has taught us anything it is the value of home and, with that in mind, we at the NRLA have joined forces with other landlord and tenants’ groups to amplify this call for help.
This includes proposals for interest free loans for tenants affected by Covid-19, to allow them to continue to pay their rent and remain in the home that they love.
This has widespread sector support, from groups including Shelter, The Big Issue, Crisis, Citizens Advice, Propertymark and debt charity StepChange.
We also need the sector to get back on its feet, moving away from the emergency measures introduced by the Government to start function as normal as the country reopens, promoting confidence in the rental market.
RICS has already warned rents will start to rise because of the increasing demand for properties at a time when new instructions from landlords are dwindling.
And Rightmove revealed that outside London asking rents increased in the fourth quarter for 2020 for the first time since 2011, to a record average of £972 a month.
In the increasingly popular suburbs, towns and villages, the level of available housing is lower than normal for this time of year, whilst demand is higher.
This situation could become more acute, with our own research showing a third of landlords are looking to sell some or all of their rental homes, with 56% losing cash as a result of the pandemic.
“If we are to ensure there are sufficient homes to rent we want to see positive action by the Government.”
To this end we believe landlords should be exempt from the 3% stamp duty surcharge on additional homes if the property they are buying will add to the net supply of housing.
This new exemption would apply to landlords developing new housing, converting large properties into affordable units, changing the use of a property from commercial to residential or bringing one of the almost 650,000 empty homes in England back into use and would be a real shot in the arm when it comes to supply.
When there is a desperate need for more homes to rent the last thing we need is to have a tax on developing new homes. It makes little sense and we have made our case to the government.
Where capital gains tax is concerned we believe the Government must resist calls to make changes or risk diminishing confidence and supply even further.
It is our belief that the Chancellor should use tax more smartly to create a healthy rental market.
We hope he will support these proposals which we believe offer sensible, workable solutions to help us create a vibrant and dynamic PRS that we can all be proud of.”