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Lettings sector tax increases – theyre hurting, but theyre not working
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Original Source: Letting Agent Today.
Original Author: Graham Norwood.
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The Residential Landlords’ Association says recent fiscal changes hitting the private rented sector are hurting tenants but failing to achieve their stated objective.
The association says recent criticisms of the cost of rental accommodation by the Local Government Association and several other bodies are merely a reflection of the supply crisis in rental housing, exacerbated by sharp falls in buy to let mortgage applications.
According to the RLA the situation is likely to only get worse as landlords feel the squeeze as mortgage interest relief is phased down to the basic rate of income tax.
RLA research has found that just 19 per cent of landlords plan to invest in new property over the next year, with 58 per cent considering reducing further investment in their rental properties due to recent finance changes because of tax increases.
It says that although ministers have sought to boost the number of homes for private rent by encouraging Build To Rent, the London School of Economics has said that individual landlords will remain the dominant players in the market.
The RLA is warning that no route can be found to boost the supply of homes for private rent that the country needs without providing support for the majority of landlords who are individuals or small firms.
Now it is calling on the government to scrap the decision to tax a landlord’s turnover, rather than profit, abandon the mortgage interest relief changes started earlier this year, and to no longer apply the stamp duty levy on additional homes where a property is adding to the supply of housing available to rent.
