Please Note: This Article is 8 years old. This increases the likelihood that some or all of it's content is now outdated.

The Chartered Institute of Housing (CIH) and Resolution Foundation (RF) think letting agents should be stopped from charging tenants’ fees.

This, they are arguing in a recent report they have jointly commissioned, will help improve the private rented sector (PRS).

They are also suggesting that tax breaks should be brought in for landlords who improve their rental properties.

The report which warns that more effective regulation is needed to tackle rogue landlords, recommends:

– Creating a single, easily understood set of minimum standards (covering both property conditions and housing management) for landlords and making sure that sufficient resources are made available for enforcement.

– Extending the regulation covering estate agents to letting agents and stopping letting agents charging tenants fees for their services.

– Considering the use of incentives by the government to encourage landlords to commit to higher standards (over and above the legal minimum).

– Developing a nationally agreed set of standards for accreditation (covering both property conditions and housing management)>

According to the report’s authors private landlords are currently receiving around £7bn in tax allowances every year, which includes repairs and maintenance, but, they argue, there is no incentive to make improvements or to carry out work above the minimum housing standard.

With the private rented sector (PRS) doubling in size to 4m households since 1992 or 18% of all English households, CIH & RF claim that fully one-third of these are failing to meet modern standards.

The CIH chief executive, Grainia Long, has said:

“With more and more people living in the private rented sector – including more older people, more families with children and more vulnerable people from the housing waiting list – it’s vital that we look at new ways to raise standards. The cost of housing means that for many people, the private rented sector is the only option, but too many of them are having to put up with poor standards and insecurity.”

The RF deputy chief executive Vidhya Alakeson has said:

“Many landlords already benefit from generous public subsidy but, while many of them are responsible, not all of them give anything in return. By introducing the principle of getting something for something from this investment we could ensure that housing is improved and works better for both tenants and landlords. Government should incentivise those who work to raise their game in order to improve the overall standards of private renting.”

Arguing that landlords need a carrot as well as stick to improve the private rented sector, the report suggests:

– Current government policy is mostly focused on improving standards by encouraging greater competition in the sector, while Labour policy is mostly focused on greater regulation. But CIH and RF said a combined ‘carrot and stick’ approach would be more effective.

– Giving accredited landlords a more generous tax allowance for ‘allowable expenses’ (where landlords deduct the cost of repairs from their profits for income tax purposes), compared to unaccredited landlords.

– Allowing landlords to treat any improvement needed to bring a property up to standard as an ‘allowable expense’, instead of deducting it from their capital gains tax liability when they sell the property – so they would get a more immediate tax benefit from the investment.

– Allowing accredited landlords to benefit from capital gains tax rollover relief (meaning that if a rented property is sold and the proceeds are immediately reinvested in another, the landlord would not pay capital gains tax on any profit they had made).

Download the full report here:

Please Note: This Article is 8 years old. This increases the likelihood that some or all of it's content is now outdated.


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