The Residential Landlords Association (RLA) is campaigning to get the tax rules changed because it says this is needed to boost the supply of new homes to rent.
With the number of homes coming up to let in short supply, the RLA is calling on the government to re-think the way that landlords are taxed.
It is estimated that by 2025, over 25% of UK households are likely to be in privately rented accommodation. Rental demand for small-scale independent landlords’ accommodation, despite the government’s push for large scale build-to-rent, will continue to grow.
The latest statistics are showing that there is a worrying decline in the number of residential properties to let. This is not only exacerbating the so called “housing crisis” it’s putting renters under tremendous pressure when they can’t find suitable accommodation at a reasonable price.
Figures just released in the Dwelling Stock Estimates in England (2017) Report published May 2018 (see link below) show that between March 2016 and March 2017, the owner occupied dwelling stock increased by 262,000. But the private rented stock decreased by 46,000. The social and affordable rented stock increased by 3,000 dwellings and the other public sector stock decreased by 1,000 dwellings.
The RLA argument is that buy-to-let investors have been deterred from investing because of the 3% stamp duty surcharge on all second homes, including buy-to-let homes. In addition, the phased-in reduction of mortgage interest relief is also having a big impact on investment in the sector.
All the signs are that rents will continue to go up in the future despite Prime Minister Theresa May’s wise words when she launched the new National Planning Policy Framework, when she stated that when “supply goes up”, “rents come down”.
David Smith, The RLA’s Policy Director, has said:
“The figures [from RLA] 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.”