The Association of Residential Letting Agents has made an uncompromising set of demands on the government, asking it to implement a series of pro-private rental sector policies at next month’s Budget.
Firstly it wants an exemption to the three per cent stamp duty surcharge for buy to let purchasers.
“By failing to offer exemptions to institutional investors, the policy has stifled the private rented sector where rents are rising. In February 2018, the Intermediary Mortgage Lenders Association estimated that buy to let investment fell from £25 billion in 2015 to only £5 billion in 201717. Furthermore, increasing the taxation burden on landlords’ results in costs being passed back to tenants through higher rents” it says.
In December ARLA reported that 32 per cent of agents witnessed rent increases, up from 16 per cent in December 2017 and December 2018.
“This is in contrast to only 1.1 per cent of tenants being able to negotiate a rent reduction, the lowest figure since records began. This means that people have less money to save and it is harder for them to get on the housing ladder” says the ARLA submission, which explains the situation is down to the fees ban and tax changes detrimentally affecting agents.
“The government must recognise that in order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result tenants will continue to pay higher deposits.
“This is important because if supply of rental accommodation falls further, tenants will only be faced with more competition for properties, pushing up rent prices on good quality, well managed accommodation and decreasing tenants’ ability to negotiate rent reductions.
“Therefore, we believe the government must consider launching a review of all taxes relating to private landlords in order to develop policies that promote long term investment in the sector and reduce costs for tenants.”
The ARLA submission goes on to say that abolishing the three per cent surcharge on additional properties would encourage further investment into property - without abolition or exemption, there will be a continuation of the fall in sales on second and buy to let property which contribute towards the economy in tax.