x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Controversial tax changes are 'choking off' rental property supply

The introduction of a 3% stamp duty surcharge on the purchase of buy-to-let properties and the phasing out of buy-to-let mortgage interest tax relief have had a significant effect on rental property supply, according to the Residential Landlords Association (RLA).

The trade body's analysis of the government's latest Dwelling Stock Estimates suggests that a fall in private rental sector stock is down to landlords being discouraged by the tax changes.

Between March 2016 and March 2017, the government estimates that the number of private rental homes in England fell by 46,000. The RLA points out that this is the first year after the 3% stamp duty surcharge was introduced and the final year before the phasing out of buy-to-let mortgage interest tax relief began.

The Office for National Statistics data reports that the fall last year - which means private rentals account for around 20% of all stock - was preceded by successive year-on-year increases.

It estimates that the number of private rented dwellings in England stood at 4.8 million in 2017.

The RLA says that these figures, combined with a report from ARLA Propertymark which suggests demand for rental properties continues to rise, is damaging tenant choice.

"Tax hikes on the sector are choking off supply and making it difficult for prospective tenants, many of whom cannot afford to buy a home of their own, to access the homes to rent they need," says David Smith, the RLA's policy director.

He goes on to question the Ministry of Housing's corporate plan which pledges to support the delivery of one million homes by 2020.

"This is hardly an auspicious start," says Smith. "Delivering homes just for those who can afford to buy is not a policy which meets the needs of many less fortunate households in the UK."

"With corporate investors still accounting for only two per cent of the private rental market, it is time to develop pro-growth taxation that supports the majority of landlords who are individuals or small businesses to invest in the new homes to rent we desperately need,” he adds.

Poll: Do you think the fall in rental stock can be blamed on the government's tax changes?

PLACE YOUR VOTE BELOW

  • Simon Shinerock

    You can’t get a pint out of a half pint pot, something I learned when I was a tot, if you don’t know that then you must be a clot, or perhaps your the Pope and you’re high on pot, it’s a fact of life believe it or not

  • phil dillon

    https://petition.parliament.uk/petitions/219279

  • icon

    It’s going to get a lot worse when those first s24 tax bills hit the Matt this is just the beginning. 4 sold this year more to come and I have incorporated but don’t trust this government or Commy Corbyn as to what’s in store next terror suspects get better press and treatment than landlords

  • icon

    Owning your own home is not always the answer but while property prices at the lower end are being artificially held up because of buy-to-let policies then ownership by first time buyers remains out of reach. What is needed is a complete shake up and a levelling of house prices which are currently too high. If they dropped to realistic levels and wages rose more people would be able to afford to buy. Not sure why it's seen as undesirable for everyone to be able to afford a roof over their head whether it be rented or owned. Isn't that what a Labour government would work towards?

    Simon Shinerock

    Sue, mucking about with who owns what doesn’t create more houses, it distracts from the fact we have insufficient homes of any tenure. What amazes me is how you and so many others refuse to acknowledge this simple truth

     
    icon

    Sue, I'm not aware of a single shred of hard evidence that says BTL has created artifically high prices on starter homes. Surely the opposite is true. There are thousands of HMOs out there that have provided homes to single people (sometimes couples) and have therefore reduced pressure for the type of homes you mention. Plus BTL has created investors that convert commercial to resi creating more new homes, usually of the starter type. Many landlords put down deposits on off-plan homes which FTBs can't do, but in doing so they're helping to the addition of housing stock and therefore again relieving pressure on the market.

    You suggest that house prices dropping would be a good thing. I'd take completely the opposite view. Firstly there are many people that have got on to the ladder in recent years, despite what the press would have us believe. What you are wanting would result in many of them being stuck with negative equity and it would be a double blow for those that would be coming out of the Help To Buy scheme as they would revert to a LVR and with zero chance of finding a better deal.

    Those that would look to take advantage of buying with dropping prices would find that lenders wouldn't lend.

    Builders would also cut back their output exacerbating the shortfall in construction. The building industry also makes up about 8% of the economy so if that declines it could push us into another recession and everything gets a whole lot worse!

     
icon

Please login to comment

valpal
submit
sign up