The influencial cross-party Commons Treasury Committee says the whole economy could suffer is George Osborne’s fiscal measures against the private rental sector lead to a drop in the number of homes to let, and so to a reduction in labour market mobility.
Osborne has in the past year announced the phasing-in of reductions in landlords’ mortgage interest tax relief from next year, and wants to introduce a stamp duty surcharge on the purchase of buy to let properties from this coming April.
“Were the measures taken to curb buy to let to have a substantial effect, they would come at a cost to the wider economy” according to a statement from the committee of MPs.
“Access to a well-functioning, affordable housing market, including for private rented properties, has been widely recognised to be crucial to labour mobility, and hence the overall efficiency of the labour market. Any impediment to labour mobility will reduce employment, economic activity, and the economy’s long-run productive potential” it says.
The committee chairman is Conservative MP Andrew Tyrie, who echoes many lettings sector trade bodies by saying the government’s determination to prioritise home ownership over the rental sector could have unintended consequences for the wider economy.
“The Chancellor’s attempts to resolve what he calls a ‘home ownership crisis’ should not come at the expense of the private rented sector. Housing policy in the UK has been in a mess for a long time – caused by the policies of successive governments over decades and, often, their unintended consequences. Sooner or later, more thoroughgoing reform will be essential” says Tyrie.