Responding to today’s report, “The future fiscal cost of ‘Generation Rent’,” (17 April 2018) from the Resolution Foundation, which suggests that up to a third of young people today could be renting homes into their retirement, David Smith, Policy Director for the Residential Landlords Association said:
“Today’s report shows the perfect storm that young people face. With home ownership remaining difficult for many to access, demand for homes to rent continues to increase. This is at a time when Government tax increases are discouraging many landlords from investing in new homes to rent out.
“Ministers need to make pragmatic changes to their approach to private rented housing, with a series of policies that support, rather than attack, the majority of private landlords who are individuals to invest in the new homes to rent we need alongside all other tenures. This includes greater support and encouragement for those prepared to offer longer tenancies but who are concerned about being locked into agreements where tenants might be failing to pay their rent, not looking after their property or committing anti-social behaviour.”
Recent research by the RLA has found that 69 per cent of landlords are being put off investing in further homes to rent as a result of the Government’s three per cent stamp duty levy on the purchase of homes to rent out.
The RLA is calling for a number of reforms to support those in rented housing, including:
- Not applying the stamp duty levy where landlords invest in property adding to the net overall supply of housing.
- Using a combination of tax incentives and improvements to the process for regaining possession of a property where tenants are failing to look after it or not paying their rent to provide greater confidence to landlords to offer longer term tenancies. At present it can take up to 22 weeks for a landlord to regain possession of a property when faced with tenants causing disruption. 73 per cent of landlord have told the RLA that they would be encouraged to offer longer-term tenancies if such reforms were made.
- Action to stop mortgage providers from prohibiting landlords from offering longer tenancies. 44 per cent of landlords have told the RLA that they have mortgage conditions that limit the maximum length of tenancy that can be offered.
- Establishing a new housing court to improve and speed up access to justice for tenants and landlords when things go wrong.
- Providing relief from Capital Gains Tax where a landlord is prepare to sell a property to a sitting tenant to support first time home ownership.
The Residential Landlords Association: The home for landlords
- RLA PEARL’s report, The Impact of Taxation Reform on Private Landlords, is available here
Of the almost 3,300 landlords questioned:
- 69 per cent said that the decision to impose a three per cent stamp duty levy on the purchase of new homes to rent in 2016 is putting them off investing in further rental property.
- 73% said that they would be encouraged to offer longer-term tenancies if both the Section 8 process for regain possession of a property was reformed and if there was tax relief.
- 44% of landlords have mortgage conditions that limit the maximum length of tenancy that can be offered.