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'I blame rental market stock crisis on mortgage interest relief withdrawal'

ben beadle mortgage interest relief

Landlord leader Ben Beadle has pinned the shortage of private rental sector homes squarely on the Government, saying George Osborne’s decision in 2015 to cut mortgage interest tax relief for landlords has been the key driver of the current stock crisis.

Beadle, who is Chief Executive of the National Residential Landlords Association (NRLA), says although there are many ‘unknowns’ facing the sector including the imminent Rental (Reform) Bill including changes to evictions law, the Liz Truss-inspired mortgage interest rate rises, it’s the withdrawal of mortgage interest relief that’s done the most damage to landlord confidence.

As LandlordZONE reported last month, even big corporate letting agencies are now calling on the Government to re-instate the tax relief landlords used to enjoy – like all other businesses – on their debt interest payments.

Beadle says: “Proposed acquisition is low, with just 8% of landlords surveyed intending to invest in property in the next year.

“Alongside this, planned divestment is rising – 37% of landlords plan to sell during the next twelve months.

“Much of the supply shortage can be tracked back to changes in mortgage interest relief (MIR).

“Modelling commissioned by the NRLA demonstrates that between 2010 and 2016, the stock of private rented homes increased by 3.7% per year. Between 2017 and 2021, when changes to MIR were phased-in, stock increased by just 0.4% per year.

“So, we have more than half a decade of stifled investment now coupled with increasing propensity to sell.”

But when it comes to selling up, landlord behaviour differs between portfolio sizes and location.

Almost a quarter of landlords planning to sell up are disposing of property in the South-East, excluding London. Just 4% are looking to sell properties in the North-East, the NRLA says.

Next month, Ben Beadle will be one of the experts stepping on to the Agent Rainmaker Live.


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