The new Chancellor needs to reset the Government’s approach to private rented housing.
Since 2015 George Osborne has imposed punitive tax rises on the private rented sector in the belief that landlords are preventing first time buyers getting onto the property ladder.
The Residential Landlords Association (RLA), backed up by a report from The London School of Economics, has argued however that only a minority of sales to landlords involve bids from both types of buyer.
The clamp down comes despite predictions that one million new homes to rent will be needed over the next five years and the Treasury Select Committee warning that: “addressing the “home ownership crisis” must not come at the expense of a shortage of homes to rent.”
The RLA is calling on the new Chancellor, Philip Hammond MP, to change course and recognise that forcing some landlords to sell up and stifling investment by others will only make it more difficult for many people to find suitable housing and will push up rents for those in rented accommodation.
Alan Ward, Chairman of the Residential Landlords Association said:
“Access to decent, affordable homes to rent is vital to supporting a flexible labour market, and ensuring that young people and families have a place to live.
“Whatever the new Government does to support home ownership, demand will continue to increase for homes to rent.
“The new Chancellor has an important opportunity to reverse recent punitive tax changes and support the majority of landlords who are providing good housing to their tenants to invest in the new homes we need.”
- The RLA represents 40,000 private sector residential landlords in England and Wales.
- Further information about the RLA can be found at http://www.rla.org.uk/ or by following it on twitter @RLA_News.
- The LSE’s recent report on the private rented sector can be read at http://lselondonhousing.org/wp-content/uploads/2016/05/GRP12392-LSE-report-design-WEB.pdf.
Page 5 reads: “The (very limited) research into direct competition between investors and putative owner-occupiers has found that nationwide only a minority of sales to landlords involved bids from both types of buyer. In many markets there is no meaningful competition and first-time buyers on modest incomes can readily afford homes.”
Page 7 reads: “Private individuals are and will continue to be the bulk of landlords, even if institutions massively increase their Involvement.”
- Savills research as suggested that 1 million new rental properties will be needed by 2020. Details can be found at http://www.savills.co.uk/_news/article/72418/198859-0/2/2016/no-end-to-rising-demand-for-rented-homes.
- In its report on the Autumn Statement/Spending Review 2015 the cross-party Treasury Select Committee warned on page 33:
“The Committee is concerned about the focus of the Government’s housing policy. Addressing the “home ownership crisis” must not come at the expense of a shortage of homes to rent. The Chancellor should make clear what he intends to do to help those who want or need to rent, and to ensure a healthy supply of properties in the private rented sector.”
The report is available at http://www.publications.parliament.uk/pa/cm201516/cmselect/cmtreasy/638/638.pdf.
- The independent Institute for Fiscal Studies has noted that rental housing is taxed more heavily than home owners and there is little evidence to suggest that home owners and landlords are in competition for the same properties. In the oral evidence provided recently to the House of Lords Economic Affairs Committee inquiry on the housing market, the Director of the IFS, Paul Johnson noted:
“If you buy to let, you pay income tax on the return and capital gains on what comes out when you sell it at the end, which is not the case for owner-occupiers. The current system is clearly more tax favourable towards buyers and owner-occupiers than it is towards buy-to-let landlords and renters. The tax system is not, and was not, even before the recent changes, more generous to people buying to let.”
The transcript can be found at http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/economic-affairs-committee/economics-of-the-united-kingdom-housing-market/oral/30359.html.
For further information please contact the RLA’s consultant, Ed Jacobs on 0113 278 0211 (office), 07706386773 (out of office hours) or email firstname.lastname@example.org.