The Residential Landlords Association (RLA) are warning that tenants in private rented housing will be bearing the brunt of the Government’s tax increases on rented homes. This follows recent research that shows a shortage of homes to rent whilst demand continues to grow.
The Royal Institution of Chartered Surveyors (RICS) released data at the turn of the year which warned that while demand for rented housing from tenants had remained strong and consistent during the previous few months, the number of landlords listing their properties for rent had continued to decline, as they had done so throughout the previous twelve months of 2018.
The RLA now say that this mis-balance between tenants looking for property and the number of suitable private rented housing that is available is down to the tax rises that the Government has imposed on the rental sector, and it’s causing difficulties for tenants as many are struggling to find suitable accommodation.
The tax increases that have hit the rental sector includes the restriction of mortgage interest relief to the basic rate of income tax as well as a stamp duty levy which penalises the development of new homes to rent. This is all despite the Chartered Institute of Housing (CIH) recently warning that these tax reliefs will deliver greater benefits to homeowners than they do for private landlords. In 2016/17, net tax relief for owners was around £29 billion (£10 billion paid in tax; £39 billion received in tax reliefs), whereas private landlords paid net tax of at least £8 billion.
John Stewart, Policy Manager for the RLA, has said that the Treasury is looking to reduce investment levels in rented housing, but the problem with this is that the demand from tenants looking for rental properties is showing no signs of slowing down. The recent tax rises that have been introduced are only serving to make the current housing crisis even worse.
Stewart goes on to say that rather than viewing it as a problem that needs to be successfully managed, the Treasury should instead look to develop a series of pro-growth tax measures that will be able to support and encourage the high numbers of good and decent landlords across the UK to provide the new properties to rent that are so desperately needed by tenants. Without this, tenants will continue to find it increasingly difficult to find a suitable home that they can rent at an affordable price.
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