Landlords have warned that there is a looming rental crisis caused by the Government’s “reckless” plan to hit landlords with tax changes.
The National Landlords Association said that as a direct result, landlords were leaving the market and rents are rising fast.
The NLA hit out at changes made in 2015 by then chancellor George Osborne.
These included the phasing out of tax relief on mortgage interest charges.
This phasing out ends in April, when landlords will be given a tax credit of 20%.
The NLA cited figures from Zoopla showing that private rents rose by 2.6% in the last quarter of last year, with an 8% rise in tenancy demand and a 4% drop in the number of available properties.
NLA chief executive Richard Lambert said that landlord confidence is at an all-time low, with many being forced to exit the sector altogether.
He said: “Five years ago, we warned the Government that its reckless plan to scrap legitimate tax relief on landlords’ finance costs would backfire, disrupting the supply of private rented homes.
“Now, in 2020, households across the UK are reaping the whirlwind sown by David Cameron as investors turn their attentions elsewhere.
“The new government has an opportunity to break with the past and work in concert with landlords to ensure housing demand is met with good quality rented accommodation.
“We urge Sajid Javid to use his first Budget to tackle the inequity of the way his predecessors have taxed landlords.
“By focusing on Capital Gains Tax, extending rollover relief and reintroducing taper relief, landlords could be encouraged to reinvest for the long term rather than exit the market, thereby helping to avert an impending crisis.”
Comments (8)
The “consultation” on s21 (a sham if ever there was one as the decision had been taken) was fundamentally flawed. HMOs were not even mentioned. There are 500,000 HMOs in the country with 2-3 million people in them. Is it fair that housemates should live in fear in their home because of one tricky person who the landlord cannot easily evict? Good tenants will be forced to find alternative accommodation (with potentially more people moving house than if s21 was kept). Likewise, is it fair a landlord could lose all the good tenants and be left with one tricky or nasty tenant and crippling voids whilst the landlord goes through the lengthy eviction process. What will landlords and managers do to mitigate against possible problem tenants? I will no longer take chances on potential tenants who are “borderline” for their financial status or for some other social factor. I doubt I will be alone in this. Where will these rejected tenants (who make up a significant part of the population) live? It will be up to the already overstretched Councils to house them. Do Councils have facility for this? Homelessness will rise further, and thus a vicious circle emerges for those individuals. Whilst the abolition of Section 21 may be a vote winner, it is a fallacy to think it is a sensible policy. Without s21, HMO landlords cannot easily tackle anti-social behaviour (which does not have to be “true” ASB to be unpleasant for other tenants in the house). The other tenants will leave rather than give evidence. I will not be able to reassure affected tenants that I am dealing with the problem tenant(s). Younger and especially female tenants will feel unsafe. Abolishing s21 prejudices them and benefits the badly behaved tenants. “Protect the thug and the bully. Let the vulnerable take their chances!” is now to be the MPs’ rallying cry.
You are absolutely correct but we have plonker politicians told what to do by so called crazy housing charities backed by the very tenants landlords could do without to protect the many excellent tenants who would rarely be at risk of being served a s21 notice. It will reduce supply but good for cardboard recycling by those being forced to live on the street.
Oh come, come. It’s all going to be alright. Now that Brexit is done and dusted we can get on with taking back control of our rented properties. That’s what Boris promised, isn’t it? Isn’t it????
50,000 Landlords per year are exiting the PRS either selling up or converting to FHL or Airbnb.
What does it take for politicians to realise that the rental market is slow motion train crash? How bad will have to get before they see the error of their policies?
Only once they start to cut out the victims from the wreckage!
The Government has thrown so many spanners in the works from Sec.24, SL, SDLT. surcharge, CGT surcharge, TFB, RTR, Sec.21 it won’t know what to fix.
It’s solution is to throw even more spanners in!!
Although I’ve not sold a BTL property as a result of all the recent attacks, I have held back on buying. If I had confidence that the Landlord-bashing was over and I’d buy 2 more properties immediately.
Much the same. Our political plonkers will not see the damage they are doing until it is too late. For me it is the abolitiion of S21 as this is the END of the Assured Shorthold Tenancy, the basis upon which it gave me the confidence to invest a life times income. Most small time landlords do not understand the impact of edging back towards the Rent Act 1977. The fact I could control my investment by use of S21 meant all to me; even if I rarely found the need to use it. To give away the control of my investment to a bunch of left wing political so called charities has shattered any confidence I had in the residential rental market. What is clear is NONE of the political parties want private landlords having control of their own assets they wish to control your investment themselves. The sad thing is when they realise it will be too late as invesment would have been withdrawn from the UK residential market and invested elsewhere. It is the lack of fluidity of property investment which reduced the speed of change and investors moving away (which S21 abolition has started to cause LL’s to sell up bearing in mind the intent for rent control and taking over your investment). To revese the trend once it has started will be extremely difficult as people no long trust politicians with the Brexit demonstrating the type of people that run our country.