The head of a landlords’ association has warned the Conservative government not to demonise buy to let investors who typically have only one property - and are likely to be Tory supporters anyway, at least until now.
Alan Ward, chairman of the Residential Landlords’ Association, uses an article in the Daily Telegraph to accuse Chancellor George Osborne of “rhetoric” over the taxation changes proposed for the private rental sector, saying: “The evidence is clear that the Chancellor’s assertions are wrong.”
Ward cites the Institute of Fiscal Studies as saying that British rental properties are already taxed more heavily than owner-occupied properties, before Osborne’s proposed change to mortgage interest tax relief and the wear and tear allowance.
“Independent research for the RLA has indicated that each private sector tenancy nets the treasury an estimated £1,000” says Ward.
“Delivering his Budget, the Chancellor’s argument was that it was unfair that landlords are treated more favourably within the tax system than owner-occupiers. Politically, such statements go down well as the Chancellor seeks to re-establish the Conservatives’ credentials as the Party for homeownership” admits Ward - but he adds as a warning: “Using landlords, many of whom are Tory supporters, as the scapegoats for the continued failure by all parties to get to grips with the housing challenge is no answer.”
In the article Ward demands that Osborne looks again at his tax proposals for the buy to let sector, and go further to encourage private renting as a possible solution to the national housing shortage.
He wants the government to encourage development by landlords on small plots of unused public sector land that corporate investors do not find attractive, and offer capital gains tax roll-over relief where the proceeds of a rented property are re-invested in a rental property – and CGT should be removed where a property is sold to a sitting tenant or first-time buyer.
“The Chancellor also needs to make it clear that devolved powers to combined authorities will not include the ability to introduce new forms of rent control. All the evidence is that these serve only to stifle investment and diminish both the supply and quality of housing” insists Ward.