TENANTS in private rented housing are bearing the brunt of the Government’s tax increases on rented housing.
That’s the warning being issued by the Residential Landlords Association as research shows the supply of homes to rent is drying up whilst demand continues to be strong.
Data released today by the Royal Institution of Chartered Surveyors warns that whilst demand for rented housing from tenants “held more or less steady…for the third month running”, the number of landlord instructions “declined once again, rounding off a year in which they have fallen in all twelve months.”
The RLA is blaming the Government’s tax rises on the sector for the difficulties tenants now have in accessing suitable private rented housing. This includes the restriction of mortgage interest relief for the sector to the basic rate of income tax and a stamp duty levy which penalises the development of new homes to rent. This is despite the Chartered Institute of Housing recently noting that “tax reliefs deliver a much bigger benefit to home-owners than they do for private landlords.”
RLA Policy Manager, John Stewart, said:
“Whilst the Treasury seeks to dampen investment in rented housing, demand from tenants shows no signs of slowing down. Recent tax rises have served only to make the housing crisis worse.
“Rather than seeing it as a problem to be managed, the Treasury needs to develop a series of pro-growth tax measures that support and encourage the majority of good and decent landlords to provide the new homes to rent we desperately need. Otherwise tenants will find it increasingly difficult to find suitable homes to rent at affordable prices”
· RICS’ latest UK Residential Market Survey for December 2018 can be accessed at: https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-december-2018-rics.pdf. It notes:
“In the lettings market, demand from tenants held more or less steady (on a non-seasonally adjusted basis) for the third month running. Alongside this, landlord instructions declined once again, rounding off a year in which they have fallen in all twelve months. Rental expectations remain modestly positive for the coming three months, with respondents pencilling in roughly 2% rental growth at the national level for 2019.”
· In November 2018 CIH published a report on subsidies for different types of housing tenure. Details can be accessed at: http://www.cih.org/news-article/display/vpathDCR/templatedata/cih/news-article/data/Home-owners_get_more_government_subsidy_than_social_housing_tenants_or_private_renters_new_report. It notes:
“Tax reliefs deliver a much bigger benefit to home-owners than they do for private landlords. Net tax relief for owners was some £29 billion in 2016/17 (£10 billion paid in tax; £39 billion received in tax reliefs). In contrast private landlords paid net tax of at least £8 billion.”
· The Residential Landlords Association: The home for landlords
– The RLA represents the interests of landlords in the private rented sector across England and Wales. We’re home to over 50,000 landlords nationwide, with a combined portfolio of over a quarter of a million properties. A growing community of landlords who trust and rely on us to deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality services relevant to their needs.