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TODAY'S OTHER NEWS

Government’s focus on homeownership ‘serves only to hurt tenants’

New communities secretary Robert Jenrick and housing minister Esther McVey look set to focus on increasing homeownership, but this appears to be at the expense of tenants in the private rental market, according to the Residential Landlords Association (RLA).

Fresh data from the Royal Institution of Chartered Surveyors (RICS) reveal a drop in the supply of private rented housing at a time when demand from prospective tenants is rising and this is likely to push rents higher.

Tenant demand has picked up despite the government’s efforts to boost homeownership. But over recent years tax changes by the government, including restricting mortgage interest relief to the basic rate of income tax and introducing a 3% stamp duty levy on the purchase of new homes to rent out, have led some landlords to leave the market.

Yet, the Institute for Fiscal Studies has warned that it was “plain wrong” to argue that landlords were taxed more favourably than homeowners.

The Chartered Institute of Housing has also noted that “tax reliefs deliver a much bigger benefit to home-owners than they do for private landlords.”

David Smith, policy Director the Residential Landlords Association, commented: “These figures demonstrate yet again that hitting the private rented sector to boost homeownership serves only to hurt tenants.

“Demand from tenants and new buyers is increasing at the same time. It is vital that the needs of both groups are met.

“The government needs to stop making landlords the scapegoat for the housing crisis and embark on a raft of pro-growth measures to boost the supply of homes for the private rented sector. If they do not, supply will continue to fall, meaning higher rents, less choice, and a reduction in quality for tenants.”

Poll: Do you agree that hitting the private rented sector to boost homeownership serves only to hurt tenants?

PLACE YOUR VOTE BELOW

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    Worse still the current system also has the effect of limiting a renters ability to save for a home as the rent takes up most of their disposable income.

    As taxes and the true cost of legislation on landlords increases, their need to raise more revenue to meet the rising cost puts yet more pressure on rent and therefore tenants.

    This in turn puts them further and further away from homeownership.

  • Paul Barrett

    Affordability is the main reason for reduced homeownership.
    Mind you this is a mainly SE problem.
    Most other areas in the UK property is eminently affordable.
    But the majority of the whingeing GR voters are concerned with the SE.
    So that is the market Govt needs to address.
    The damage to this market has already been done by mass uncontrolled immigration.
    It will take at least a generation for that to be absorbed into the economy and by the very fact of this immigration a lot more homes need to be built in the SE.
    So the SE NIMBYS will have to accept that far more housebuilding will be required in their areas.
    But Govt has to come up with a big bribe for GR voters.
    So I suggest as a whole that MIRAS be introduced for any property up to £600000 for FTB only.
    Also allow IO mortgages again without the need for a repayment vehicle.
    HTB should also be offered for any property not just new ones.
    But even with this FTB still won't have sufficient deposit as they can't be bothered to save.
    I started when I was 15 which meant I just scraped in to buy my first home by age 23.
    Perhaps a saving scheme where for every £ saved Govt contributes a £ this in addition to HTB.
    This to be repaid interest free after say 10 years.
    The logjam of unaffordability needs to be removed.
    Only Govt can afford to do this.
    All monies would be secured on the property title so with Govt effectively becoming a lender of last resort they are still in a secure position.
    They would be effectively investing in the property market to fund homeowners while at the same time investing in a massive gerrymandering of GR votes.
    Throwing Govt money at GR is the only way the Tories have of remaining in power.
    If Labour get in they will just waste it giving it away to the feckless.
    So investing in property for FTB would be far better use of those monies.
    Either way the taxpayer money tree will be shaken.
    LL should be assisted to invest by abolishing all the recent bonkers regulations like S24 and the SDLT surcharge.
    LL bring much stock to market and especially in the case of new build facilitate building of new developments.
    I would much prefer there to be a smaller PRS and more homeowners.
    But the PRS is only so successful as it is due to demand.
    Reduce the demand and the PRS will shrink.
    So basically Govt needs to invest in millions of social housing at social rents as well FTB.
    The nation needs to be housed and as Govt doesn't seem to like LL I don't see that they have any alternative than to invest directly into the housing market.
    It would see voter approval across the board.
    Decent housing is the fundamental prerequisite that is the foundation of anyone to create a domestic future.
    Govt has to accept it will need to play a major part in achieving this.
    I suggest it will be money well spent or rather loaned for a relatively short period.
    It might even secure a few votes for the Govt!

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    I think whatever the government hands out to G R , they will still be left wing voters.

     
  • Paul Barrett

    @Andrew Townshend

    Yep I totally agree with you which is why the Tories are being so politically naive in pandering to feckless GR voters who no matter how much money Govt gives to them will still not vote Tory.
    So why bother cos the Tories have certainly p##### off about 2 million LL!?
    These LL would tend to vote Tory.
    I will vote BrExit Party rather than vote Tory.
    The Tories are losing many of their traditional supporters in their illusory chase for feckless GR votes.
    I have never seen a political party as the Tories so naive in their pursuit of an electoral demographic that have no intention of voting Tory no matter what is done for them.
    It is almost as though the Tories want to be out of power.
    I simply don't understand what the Tories think they are doing.
    Their assault on the PRS will do no good for them.




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    I'd calculate that i get 8 enquiries from eastern Europeans to just 2 from British out of 10 enquiries. These people are not looking to buy and based on their low skill, low wage through employment agencies, never will.

    Paul Barrett

    So based on your experience what is your take on there being fewer East European migrants when the UK leaves the UK!?
    Essentially do you consider that you may have to adjust your business model and as such what might you do?
    Such a scenario could easily be experienced by many other LL.
    Do you reckon you could get by with 2 applications compared to what you receive from migrants?
    Personally I would conjecture that with what I believe will be substantially reduced migrant tenant demand it would make sense to rationalise portfolios by selling off the duds with any dud tenants and deleverage on the fewer remaining properties.
    It seems to me that as the PRS rose to the challenge of providing rental properties to the millions of migrants that have arrived here since 1997 that with the hoped for effective border closure there will be substantially reduced tenant demand.
    Not sure if the indigenous rental population would seek to rent such migrant properties.
    Trouble is most of those tenants are very low grade and few LL would want them as tenants.
    I believe LL should be extremely cognisant of BrExit and carefully consider a major reduction in properties especially if mortgaged.
    I simply don't believe there are sufficient quality tenants such as the migrant ones to keep such properties viable in the absence of what must surely be substantially reduced migrant demand.
    Of course I could be totally incorrect in my connjecture of how things may play out.
    But I believe LL should be very circumspect about leaving things as they are.
    The PRS will change with BrExit and I believe it will be reduced demand that causes many changes.

     
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    Thats means they will rent , which they do and pay good rent and pay on due date and look after the LLs property.

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    Agreed, I have a few eastern Europeans as tenants, all good as gold, it's the curry eaters I avoid like the plague.

     
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