Private landlords provide an increasingly vital source of affordable and flexible accommodation for many people and the government should do more to support them, according to the Residential Landlords Association (RLA).
The importance of the private rented market in this country should not be underestimated. In the context of high house prices and limitations to the availability and growth of social housing stock, a new report by the Resolution Foundation has found that up to a third of millennials - those born between 1980 and 1996 - face living in private rented accommodation all their lives.
But the government’s decision to introduce a series of anti-landlord policies, especially in relation to tax legislation, means that many buy-to-let investors are now thinking twice about investing in property, thus threatening to reduce the supply of much needed housing stock in the PRS.
Recent research by the RLA has found that 69% of landlords are deterred from investing in further homes to rent as a result of the government’s 3% stamp duty levy on the purchase of homes to rent out.
David Smith, Policy Director for the Residential Landlords Association, commented: “The [Resolution Foundation] report shows the perfect storm that young people face. With home ownership remaining difficult for many to access, demand for homes to rent continues to increase. This is at a time when government tax increases are discouraging many landlords from investing in new homes to rent out.”
Given that many landlords with low profit margins could soon end up making a loss as a result of recent tax changes, the RLA is calling for a number of reforms to support those in rented housing.
The trade body wants to see the stamp duty scrapped for landlords who invest in property, a combination of tax incentives and improvements to the process for regaining possession of a property, action to stop mortgage providers from prohibiting landlords from offering longer tenancies, the establishment of a new housing court, and relief from capital gains tax where a landlord is prepared to sell a property to a sitting tenant.
Smith added: “Ministers need to make pragmatic changes to their approach to private rented housing, with a series of policies that support, rather than attack, the majority of private landlords who are individuals to invest in the new homes to rent we need alongside all other tenures.
“This includes greater support and encouragement for those prepared to offer longer tenancies but who are concerned about being locked into agreements where tenants might be failing to pay their rent, not looking after their property or committing anti-social behaviour.”