Having ignored calls to stop punishing landlords and rethink its stamp duty attack on the buy-to-let sector, along with the phasing out of mortgage interest relief, the government has now decided that it wants to limit tenants’ deposits to five weeks’ worth of rents, in a move that some experts fear will further reduce the number of landlords and properties available as demand from tenants continues to rise.
Mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit landlords’ profits over the past couple of years, which largely explains why so many people are exiting the BTL market and thus reducing the supply of much needed private rented stock.
There are already signs that the widening supply-demand imbalance in the industry is having an adverse impact on some tenants, with rental values rising across many parts of the country.
But rather than look out for the interests of landlords and tenants, politicians have been accused of attacking the industry for their own political gain.
Following the government’s decision yesterday to reduce the tenancy deposit cap from six weeks to five weeks, David Cox, chief executive, ARLA Propertymark, said: “Once again politicians are attacking the industry for their own purposes.
“Tenancy deposits have worked perfectly well for over a decade, and there is no basis in research that these amendments are necessary.
“This move will do nothing but push the most vulnerable in our society away from professional landlords and agents, and into the hands of rogue landlords and agents who will exploit them.”