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Onward’s report is wrong and fails to address need for ‘more homes to rent’

A Conservative think tank has been slammed by the Residential Landlords’ Association (RLA) for its inaccurate analysis of the private rental sector.

A new report by Onward suggests that the government should do more to help create a level playing field between home owners and private landlords by limiting the number of properties buy-to-let investors can own.

It also recommends ending or limiting tax breaks for both private and buy-to-let landlords, in order to deter them from investing in residential property and stem growth of the private rental market.

But the RLA says that the think tank’s assessment of the PRS is “fundamentally wrong”.

According to Onward, buy-to-let lending at the end of 2017 was above the 2007 peak. However, the trade body notes that new buy-to-let lending for house purchases has fallen from over 183,000 loans in 2007 to just 74,900 in 2017, a fall of almost 60%, according to figures from UK Finance.

The total number of buy-to-let mortgages, including re-mortgages, also fell from 339,000 in 2007 to 227,000 in 2017, reflecting the fact that the private rented sector is actually shrinking, at a time when more rental homes are urgently needed.

Onward’s report argues that landlords are taxed more favourably than homeowners, although this is clearly not the case.

The think tank goes on to foolishly argue that further tax increases are needed to reduce investment in new homes for private rent, at a time when more homes to rent are clearly needed, amid record house prices.

David Smith, policy director for the RLA, commented: “Today’s report is riddled with errors and fails to address the fundamental point that we need more homes to rent, not less.

“Rather than coming out with ideological assaults on the private rented sector, we need to reform tax so that it encourages the development of new homes to rent and longer tenancies so that the sector can adequately provide the pathway for tenants to go from renting to home ownership.”

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