A senior Conservative Peer has accused the former Chancellor, George Osborne, of exacerbating the housing crisis through his cash grab on landlords.
In an article for the RLA Lord Flight, who previously served as Shadow Chief Secretary to the Treasury, warns that the decision to tax landlords on income instead of profit and bring in 3% surcharge on buy-to-let homes will drive up rents and drive out investment. All at a time when 1.8 million new homes to rent are needed by 2025.
In his article, Lord Flight points to evidence from the London School of Economics that undermines the previous Government’s claims that landlords are buying up homes that could have been sold to first time buyers.
He also highlights assertions by the Institute for Fiscal Studies that landlords are taxed more heavily than homeowners.
Lord Flight is now calling on landlords to lobby their MPs to tell them about the damaging impact the tax changes will have on the supply of affordable homes to rent and encourage them to seek changes in the new Chancellor’s Autumn Statement on November 23.
RLA Chairman, Alan Ward, said: “Lord Flight’s analysis is correct. When we need almost two million more homes to rent by 2025, recent tax changes will choke off investment, increase rents and make it more difficult for tenants to save for a home of their own.
“The new Chancellor has an important opportunity next month to correct the previous Government’s changes to the way the rented sector is taxed. We call on him to seize this opportunity with both hands.”