Nationwide demands four tax changes to help the private rental sector

Nationwide has taken the unusual step of using its buy to let lending arm - The Mortgage Works - to make an impassioned plea to Chancellor Jeremy Hunt.

It’s asking Hunt to use tomorrow’s Budget to introduce four key actions that will help build a stronger private rental sector.

The first is a moratorium on all but essential new regulation in the private rented sector following the introduction of the Renters Reform Bill.

TMW says that over the past decade landlords have faced a barrage of regulatory changes and after the Bill becomes law there should be a pause for  changes to be implemented. 

It says: “A moratorium would provide certainty for landlords following a period of change and allow Government to assess the impact of the Renters Reform Bill on improving the sector. It will allow landlords to focus on providing quality homes for their tenants and fostering better landlord tenant relationships.”

Secondly TMW wants Hunt to incentivise landlords to carry out energy efficiency work.

The lender says failing to incentivise landlords to make their homes more energy efficient is leading to increased energy consumption, negatively impacting tenants, the sector and exacerbating the climate crisis. 

The Mortgage Works says government should “allow energy performance improvements to be deductible against rental income for tax purposes. This would help make energy performance investment more attractive for landlords, benefiting tenants and helping meet the UK’s net zero target.”

Thirdly there should be an increase in funding for social housing. 

It says: “The government should ensure appropriate funding is available to deliver the additional 90,000 homes per year into the social housing sector, as recommended by groups including the National Housing Federation to relieve pressure on the private rented sector and to support those most in need.”

Finally TMW wants Hunt to review changes to mortgage interest relief and landlord taxes.

The lender says the review should aim to reintroduce financial support to retain landlords in the sector, both in the form of mortgage interest tax relief and slashing the three per cent stamp duty surcharge on additional homes.

Damian Thompson, director for The Mortgage Works, says: “The current taxation system is counterproductive, hampering progress within the UK economy, and negatively impacting tenants and landlords. 

“Without the government permitting landlords to offset mortgage interest against their rental income or making equivalent interventions, tenants will face reduced choice, increased rents and potentially less well-maintained homes, and the UK economy will suffer as a result.”