Axing its controversial cuts to mortgage interest relief would be the best way for the government to support the country’s small-scale landlords, says the RLA.
In its submission, ahead of the 2017 budget on November 22nd the association said the government should follow the lead of Ireland by scrapping the changes.
It is calling for action on the mortgage lenders who prevent landlords from offering the ‘family-friendly’ longer tenancies that some renters want and the introduction of a scheme allowing tenants with good payment histories to have them recognised by credit reference agencies.
It is not all about problems. The RLA submission includes viable solutions.
The association has put forward a number of proposals, including calls for the government to introduce tax incentives for those landlords willing to sell properties to sitting tenants, those offering longer tenancies and those investing in energy efficiency improvements.
The RLA believes that where a landlord is prepared to sell a property to a sitting tenant the 20% rate of Capital Gains Tax should be applied rather than the current 28%
DJS Research findings for the RLA report that 77% of private landlords would consider selling their property to tenants if the tax liability was waived.
The association would also like to see unused and abandoned plots of public sector land redeveloped as new sites for PRS homes.
All projections are that the demand for homes in the private rented sector will continue, with predictions that 25% of all homes will be in the PRS by 2021.
But supply is a huge problem.
The government has encouraged greater institutional investment in the private rented sector but evidence shows that this will never be enough to meet the rising demand.
The market will continue to be dominated by individuals and small firms renting out a few properties – and these people need support.
The RLA has been campaigning tirelessly for the reversal of the changes to MIR since they were announced, with thousands of members contacting or meeting their MPs to press home the devastating consequences of the plans on their tenants and businesses.
RLA Chairman Alan Ward said: “RLA research shows many landlords have stopped investing in more properties as a result of recent tax changes, instead moving into short term holiday lets or ceasing to rent to groups deemed ‘high risk’ such as the young and those on benefits.
“These decisions have far-reaching consequences for a country in the grip of a housing crisis and we will do everything in our power to convince the government that this unfair tax must be reversed.”
To read the budget submission in full click here.