The Guild of Property Professionals is calling on the new chancellor, Rishi Sunak, to use his Budget speech, which will take place tomorrow, to support investment in the private rented sector, as research shows that buy-to-let landlords are exiting the market in droves.
Tax and regulation changes continue to have a negative impact on the buy-to-let market, with a significant number of landlords selling buy-to-let properties with a view reducing their portfolio, or exiting the market altogether.
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 few of years, which partly explains why so many people are exiting the BTL market and thus reducing the supply of much needed private rented stock.
The government’s draconian tax changes have not just pushed a number of BTL landlords out of the PRS, but also left many prospective tenants with little alternative but to bid against each other, pushing rents up in the process, as a result of falling housing supply.
Iain McKenzie, CEO of the Guild of Property Professionals, said: “If we wish to sustain a thriving private rented sector there must be no further taxation on landlords. Tenants want more choice not less.
“The government should do more to support landlords to remain in the sector, not drive them out, which will ultimately cut the supply of rental properties and put upward pressure on rents.”
The housing market has had a strong start to the year, with improved activity levels and property price growth across every region in the UK, and McKenzie hopes that this trend will continue for the foreseeable future.
He continued: “Ideally, the housing market needs 12 months of a stable environment to enable it to bear the fruit of pent up frustration. It would be pertinent for the government to avoid anything that could hamper consumer confidence, which is already at risk with the threat of tough measures to prevent the spread of Coronavirus.
“It is likely there will be further support for first-time buyers by way of discount through a ‘First Home’ scheme, which could see new homes discounted by up to 30%. Whilst it is fair to say that first-time buyers are the lifeblood of the property market, getting the balance right between new buyer incentives and support for second-hand house buyers is the key to a fluid market.
“With that in mind, like many, we would welcome any positive news on Stamp Duty. Boris Johnson had previously pledged to implement changes to current stamp duty legislation by raising the threshold to £500,000. Although mentions of this have been more subdued in recent months, it would relieve large sections of the country from the burden of stamp duty and go a long way to bolstering consumer confidence.”
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The government won't support small landlords because its actions prove it supports big corporate landlord managing hundreds, or thousands of properties - check Hamways as example - 3500 properties and growing, owners are good friends of the governing lot. While small letting business initiatives are forced out of the market, large companies grow even more by adding more properties to their portfolio (no stamp duty for landlords having more that 15 properties?) and taking stronger control of rental market...
Good luck for tenants... they may feel strong when dealing with individual landlords but they will face much stronger resistance from the big players...
No stamp duty for people with more than 15 properties ??? When did that come in please ,
No Further Taxation?? Sorry that doesn't go far enough. Section 24 is a punitive taxation that needs to go. It was brought in under false pretences - levelling the playing field with 1st time buyers - it is also retrospective in that it punishes people who had invested in property as a Pension plan.
Section 24 also goes against a basic principle of accounting taxation - Profit = Income - Expenses - NOT if you are a Landlord with Properties held in your personal name!
The RNLA & other Landlord representative bodies need to do more (SHOUT MORE) to get the Gov to listen.
I agree with John Mac , totally disgusting this tax system for landlords I’m sure it actually prejudice against us , ??
Where’s the RLA shouting we pay our memberships someone get a voice ,
I’d also like to see a record of MPs and anyone knowing these tax changes were coming in ! Who sold their rental properties prior , the whole situation for us landlords stinks now !!! Iv been one for 38 years and work heavily with vulnerable people , now I work for the TAX man
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