Finance and Taxation Reform Research

Call for change as young renters face ‘perfect storm’

letting agent fees
Sally Walmsley
Written by Sally Walmsley

The RLA has asked the Government to reconsider the way landlords are taxed after a new report from the Resolution Foundation claimed 16% of young people will never own their own home.

Entitled ‘Home improvements: action to address the housing challenges faced by young people’  it says more needs to be done to improve security in the sector and calls for the introduction of indeterminate tenancies and ‘light-touch rent stabilisation’.

On a more positive note it also advises tripling the capital gains tax allowance for those selling to a first time buyer to encourage landlords to sell-off properties.

Responding to the report RLA policy director David Smith said the Government needs to focus on pro-growth taxation policies to help landlords provide the extra homes to let that are needed.

He 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’s research arm PEARL has found 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:

  • Waiving 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 home where tenants are neglecting it or not paying the rent. 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.

To find out more about what the future of renting will look like why not attend the RLA’s Future Renting North conference next week.

Greater Manchester Mayor Andy Burnham will be the keynote speaker at the event at the city’s Concorde Conference Centre, with a packed programme, focussing on the future of the PRS in the north.

For more information and tickets  visit our conference pages.

 

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and award-winning Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

1 Comment

  • Not one of my tenants is in a position to purchase. I would like to see the research which shows that this would be beneficial.

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