Banning letting agents levying fees on tenants and extra tax breaks for landlords who sign up for a national accreditation scheme have been proposed by Chartered Institute of Housing.
In a report jointly written with the Resolution Foundation, a charity with links to the Nationwide building society, the CIH says that targeted incentives for landlords would encourage them to improve the maintenance and management of properties.
Private landlords currently receive around £7 billion of tax allowances a year, including for repairs and maintenance, but the groups say there is no incentive to carry out work above the minimum standard.
The report recommends:
- Creating a single, easily understood set of minimum standards of property conditions and housing management, appropriately enforced;
- Extending the regulation covering estate agents to letting agents and stopping letting agents charging tenants fees for their services;
- Considering the use of incentives by the government to encourage landlords to commit to higher standards, over and above the legal minimum;
- Giving nationally-accredited landlords a more generous tax allowance for allowable expenses' where landlords deduct the cost of repairs from their profits for income tax purposes - unaccredited landlords would not receive this allowance;
- Allowing landlords to treat any improvement needed to bring a property up to standard as an allowable expense', instead of deducting it from their capital gains tax liability when they sell the property, so they would get a more immediate tax benefit from the investment;
- Allowing accredited landlords to benefit from capital gains tax rollover relief (meaning that if a rented property is sold and the proceeds are immediately reinvested in another, the landlord would not pay capital gains tax on any profit they had made).
Richard Blanco from the National Landlords' Association said the organisation would welcome a tougher action against exploitative landlords.
"Landlords run businesses and anything that encourages us to reinvest our profits or improve our properties is to be welcomed," he said. "Rogue landlords ruin our reputation and we want to drive them out."
Comments
It is becoming clear in Scotland that rents have risen as a result of the ban on letting fees.
http://www.edinburghnews.scotsman.com/news/average-rent-in-city-up-5-in-a-year-1-2749043
"There is a suspicion that the recent banning of agent fees to tenants has had an upward impact on rents. Several agent clients have suggested this to be the case and our data seems to support this view.