The Government’s efforts to free up housing stock for first-time buyers through a clampdown on buy-to-let may be backfiring, the chief executive of haart has claimed.
Commenting on Office for National Statistics data showing UK rents rose by 2.6% in the 12 months to April 2016, Paul Smith said a decline in stock, due to fewer buy-to-let landlords, would drive prices up and hit those saving for a deposit on their first home.
He said: “While the number of properties available to rent surged following a rush from buy-to-let investors in advance of the Stamp Duty changes on April 1, we are now seeing a decline in stock as investors withdraw from the market.
“Ironically, the Government’s efforts to help first-time buyers by penalising investors, could end up hindering them as a shortage of rental properties will drive up rents in the long term, making it more difficult to save up for a deposit.”
The ONS data showed that private rental prices grew by 2.8% in England, 0.2% in Wales and 0.5% in Scotland in the 12 months to April 2016.
Rental prices increased in all the English regions over the year to April 2016, with rental prices increasing the most in London at 3.7%.
Well no surprises then. The whole industry had told Osbo this but he had his fingers in his ears and was going La La La. The reason being is that his attacks are nothing to do with helping FTBs on the ladder. If he’d wanted to do that then he’d have warmly welcomed the NLA suggestion for CGT relief if LLs sold to FTBs. It was a flat refusal, so clearly FTBs are way down the agenda. And of course, as I repeatedly point out, if the Government was so concerned about the housing situation then the Housing Minister would be in the Cabinet.
These attacks are for two reasons. Primarily it’s just another tax grab but this time on the largely disadvantaged population, i.e tenants. Some will be able to afford the higher rents that this will ensue, others will not and will lose their homes. That particularly applies to those on HB, which is somewhat of a false economy by the Chancellor as it will cost a great deal more to house those people in emergency accommodation.
The tax attacks go along with all the other money grabbing Mr Osborne is doing in giving people ‘pension freedom’ so that he can grab tax. Indeed this alone will push many people into the higher tax brackets. The problem long term is that a future Chancellor cannot then take that tax. Add to that the sell-offs of all the Country silver such as Land Registry, The Royal Mint, Ordnance Survey, etc, etc, etc and the changes in taxation to our industry really highlight that they are completely unrelated to improving the housing opportunities for youngsters.
And then there’s the other reason for them and that is to intentionally push up rents so that the Build-To-Rent companies (pension funds included) can look forward to even greater profits. Just don’t get me started on that one!
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Well Done JMK. I think you hit every point there.
On a separate note. It’s a bit of a worry that a CEO of a large agency can actually believe this was about FTBs.
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I cannot see why the government are looking to hit the PRS so hard.
Granted they are an easy target to raise taxes, but surely the biggest issue facing our country is good affordable housing not actual home ownership.
We are told time and again that we do not have enough “Council Houses” anymore, so more and more families are on housing benefits and having to turn the the PRS.
If the government are now trying to stifle the the stock entering the PRS where are the increasing numbers of families that need to be homed going to be put?
These are not the type of individuals that can/will save for a property to buy, they are in the system of perpetual renting.
I have said it time and again the only way to solve our housing crisis for first time buyers and renters is build more homes, new city’s if need be, times change and we have to change with them.
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‘I have said it time and again the only way to solve our housing crisis for first time buyers and renters is build more homes’…
…or control the ever increasing population. 330,000 extra people in the last year alone came to the UK – this does not make it any easier to find an affordable home, buying or renting.
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Thats a different can of worms.
You neglect migration and death from this country. And then you have the pros and cons of immigration.
Immigration is a sensitive subject and probably not best discussed here. (especially considering the passionate views a portal can generate!)
Doing a Trump and just saying close boarders will not solve the housing crisis in this country.
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Migration is a factor that cannot be ignored because it is a sensitive subject and one has to look at the numbers of people needing housing and the number of homes available. As long as there is an imbalance there is a problem. It is Government that is to blame as they have not provided the council and social housing, indeed much has been lost or sold (including right to buy) and no investment made. Successive Governments have been asset stripping since Maggie Thatcher started it with the Right To Buy. The Right to Buy would not have been a problem if the money was solely invested back into new housing.
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Agreed but Osbo really doesn’t give a flying you know what about solving the housing crisis, it’s tax take and helping corporate chums (some of which have donated large sums to the Conservative Party).
Here’s a plan, outline admittedly, but still a proper plan on how to solve the housing crisis… http://saynotogeorge.co.uk/how-to-solve-the-housing-crisis/
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The conservative policy of reducing renting and encouraging buying will have the same effects as the 1970’s Rent Acts and there will be a problem with flexibility with the work force as people will not so easily be able to move to where the work might be. Constant attacks on landlords will eventually reduce rental supply. Government is not really providing social housing so where will people live? Rent caps have not really worked and the sad thing is they are attacking the poor who are now being moved from B&B’s to B&B’s in far flung places where it is cheaper to house them. It is one great big disaster for the poorest in society.
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I thought as much this would happen, didn’t we all? somehow investors will be wanting to make up for that additional cost and where else to take it than the rental incomes? It would be that rather than the extra year or two to gain back their loss in the additional tax.
This in turn has made the whirlpool before getting on the property ladder even stronger sucking people further and further away, the government backed schemes are like a frail rope being thrown to aid them – its a nice gesture but its not really helping the main issue which is their deposits.
Either parents are going to be lumped with their children until they’ve got children! or another alternative will have to be thought up to save the UK housing crisis – New homes? Stronger FTB Schemes? Market Crash…?
-Insight is having the foresight to now know what seemed to obvious in hindsight.
Z
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