A Conservative MP is calling on the government to help landlords boost rental supply by reforming taxation.
Andrew Lewer, Conservative MP for Northampton South, also wants an overall increase in house building volumes in a bid to ease the current mismatch between tenants and available rental units.
Writing in The House of Commons magazine Lewer makes an eloquent case for reform, saying: “Restrictions on mortgage interest relief and the imposition of a stamp duty levy on the purchase of homes to rent out have indeed made life more costly for landlords.
“Landlords are seeing the cost of their mortgages going up and it quickly becomes a far more financially prudent decision to sell their homes rather than deal with the burdensome and indeed confusing job of managing a buy-to-let.
“Marry this to the uncertainty surrounding the government’s plans for the sector, whether in energy efficiency requirements or the ending of Section 21 repossessions, and you do not exactly have an attractive market.”
He wants reform to begin with the scrapping of the additional homes stamp duty surcharge which, he claims, “would see almost 900,000 new private rented homes made available across the UK over the next decade. This would lead to a £10 billion boost to government revenue through increased tax receipts.”
He also wants an unfreezing of Local Housing Allowance and greater security on future rental regulations to encourage long term investment.
Lewer adds: “There is perhaps a myth that the rental sector is dominated by property tycoons; in fact, individual private landlords make up 94 per cent of the market share with half letting just one property. Landlords cannot simply shoulder the rising costs.”
You can read the full article here.
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He’s wasting his breath he didn’t mention to biggest problem.
Removal of Section 21 the root cause of all Housing Problems, wakie wakie.
BIT. TOO. LATE. MATE
John, when did I get the chance to be early. I didn’t get the opportunity no consultation decisions just make, that’s fine keep causing homelessness / misery / suffering destroying the economy wasting billions.
He forgot to recommend that the Govt stops allowing spurious SL schemes that achieve nothing other than increasing costs for all concerned.
The amazing thing about it all it was zero cost to the Government, now all that has changed creating more homeless increased cost of renting and longer queues for housing benefit.
One MP with a bit of an understanding of the issues is a start. All we can hope is that some of his colleagues wake up and realise most of the anti landlord policies need to be reversed.
People need to live somewhere and with much higher interest rates and the likelihood of house prices falling lenders have become more cautious. A great many people who could clear mortgage lending criteria last year won't clear this year. House builders are slowing down on new builds as people are finding it hard to get mortgage offers. That in turn slows down the delivery of the subsidized Social Housing or shared ownership building on each new estate.
The only thing with any real scope for providing homes for people short to medium term is the PRS. We need tax policies that encourage us to stay and even expand.
Section 24 needs to go. Our taxable profits need to be calculated in the same way as EVERY other business in the country.
Removing the extra 3% SDLT, at least on homes that are going to be occupied as someone's primary residence, would help. It shouldn't matter if it's owner occupied or tenanted as long as it's lived in full time.
Make a decision on EPC C. Is it happening or not? Who is funding required work? Will it be tax deductible or capital improvement? How will the exemptions work?
Changes to or abolition of Section 21 need to wait until Section 8 works properly and all court backlogs have cleared.
Large chunks of the Rental Reforms White paper need to be scrapped or significantly amended.
CGT needs to be looked at. Why would anyone become a landlord these days with no clear exit route? Most of the gain in property value is solely down to inflation. We need indexation relief. Unlike shares we can't sell a house in tax efficient bundles. Unlike shares (where dividends are taxed at a much lower rate than earned income) we pay staggering amounts of income tax on our turnover (not profit). If we have owned our BTLs long term 28% CGT effectively means the government is stealing around 20% of each property we sell. If we sell a 5 bedroom house we may be left with enough money to buy a 3 bedroom one. How is that right?
Jo, very well said, i'm completely in agreement.
Let's hope that other MP's can understand exactly the points that this MP is making.
Today I will be writing, again, to my MP to request that she supports this initiative.
Maybe they are just beginning to wake up to the fact that LLs are totally fed up of their antics.
The Fact and it is FACT, that LLs are selling up in their droves because of the Government and Councils constant chipping away at our industry.
They maybe realising that a MASSIVE problem is coming down the road at them at an ever increasing speed.
That problem is so simple really that even a Government Minister or Council CEO must be able to work this equation out.
Very little building if any of social housing.
LLs selling up in there thousands.
This can only lead to one thing.
Councils will be putting all these homeless people into B&Bs or cheap hotels and they will have to pay what will be a massive bill for all this.
Now since they decided to vastly reduce CGT allowances LLs will be selling up that much faster as there is now no need to spread it over the years to take advantage of the allowance.
I had 12 properties that I rented out that is now down to six and the rest will be gone within the next two years.
These are not being sold to LLs so are 6 less properties on the rental market and that’s just me.
SO LESS PROPERTIES ON THE RENTAL MARKET MEANS HIGHER RENTAL COST FOR THOSE LEFT.
ITS CALLED SUPPLY AND DEMAND.
I’m actually quite glad to be getting out of being a LL.
Good Luck with that one Mr Government and Mr Council.
Peter, I'm in the same boat. I also had 12 properties. I'm down to 10 now with another 2 going on the market at the end of this month. It feels like I'm throwing away my hard earned pension but it also feels like I have no choice but to get out whilst I can. If matters get worse, and they will, we'll all be banned from selling our own properties... We already have a rental increase ban and eviction ban in Scotland... Just the start of things to come., the tip of the iceberg in my opinion.
Wow a sensible MP. I bet he stays on the back benches. Likewise I've already sold 8 properties, only got 8 left.
An MP who has actually realised that rented out houses earn revenue for the government whereas owned ones don't.
Absolutely! I pay around £10K pa tax on my rental income. If I were not a landlord, and all my properties were owner-occupied, HMRC would get nothing.
Lower tax, increase revenue! Sound familiar? Something Liz Truss got wholly wrong! If she had lowered Corp Tax, there would be more revenue because more companies would post their profit in the UK. It’s a business decision for companies, but your standard worker cannot make that decision so when you reduce tax across the masses, you don’t increase revenue. The same goes for Landlords, it’s a business decision. Lower taxes, we will invest more and increase revenue!
Too little... Too late! I'm out!!
The government are like a drunk man in a bar trying to find their way out….. there is no chance of them doing anything. We will keep selling and renting will get more expensive.
This is the first MP that has stood up to publicly support landlords as far as I know. I applauded his insight.
I remain sceptical about any movement in Gov policy so I am continuing to sell of my remaining 6 ( down from 16 in 2016)
You've done well, I wish I had sold more in last 18 months. Hindsight is always the best view.
Berrr-luddy hell! A tory MP who has finally, 7 years late, seen the light?!?! I’m shocked I tell you. If only his colleagues had an ounce of this common sense we’d be fine. Shame most of us have already rocketed rents upwards and sold out our property interests. The utter fools. They all stood and cheered the attacks on landlords in the Commons, now they pretend they didn’t see it coming. And one man’s opinion clearly isn’t changing anybody else’s mind on the subject so it’s all meaningless.
Andrew Lewer is throwing us a few crumbs because he also included to increase building its now starting to hurt the big boys, their sales dropping off so he has to try and revive their fortunes even if it means give us a few scraps.
There is no way it will happen until at least Nov 2024 Autumn statement, the Tories are not going to give what will be seen as a rich persons tax break before the May 23 council elections or the likely May 2024 election. Whilst they actually may want to, too much of a free hit for Labour who would have a field day as they did with the Kwarteng tax break. This is the type of policy a new mandate brings when you can afford to be unpopular and give people time to forget.
Let us not forget… Labour will be in government next, and they hate us 😱😱. Sell Sell.
We already have Labour in Wales and they hate us here.
New contracts for tenants to replace AST's, with much more onerous anti-landlord terms.
Trouble is that it is going to be difficult to sell anything whilst mortgage rates are rising and there is uncertainty in the market.
Couple that with the ridiculous reduction in capital gains tax allowances, it is difficult to see where this is going to end.
Have a house next door to one of my rentals that I was hoping to sell, that has been withdrawn from the market as she has not received any viable offer, so I am stuck with this and have a tenant that hasn't paid his rent for two months, so It will now cost me to get him out.
This country has always been discriminative, a policy of divide and rule and pitch one sector against the other.
Landlords did not receive any help during Covid and yet many sectors received generous handouts. We suffered losses in rent and the cost of trying to get rent arrears, and many had to bear the cost of evictions.
Many small and large companies till have mortgage, loan cost used in a calculations for expresses. We do not where is fairness. Landlords mostly get a bad press and I hope the public will wake up to see the profit levels in Supermarkets and the rest.
A lot of businesses got bounce back loans which they never had any intension of paying back, and never will, this country stinks.
Too many falling through now is it one in four ?, some falling through more than once I see that for myself don’t need stat’s. I see 2 new houses which are well done and were ready in the good times 8 mths ago but too highly priced, now falling through a second time at a reduced figure.
Thanks to Removal of Section 21 the biggest factor, they still don’t get it because the decision makers didn’t know in the first place. They thought just let’s take the money from the private rented sector without knowing anything about the business.
Apart from high interest rates thousands of landlords are not buying because of this, more can’t wait to get out, some are lightly leveraged or loan free but won’t be buying just sit tight twirling their thumbs, no Section 21 no Business Plan it a bad joke, screw the LL install a Tenant for life in his Property possibly on Benefit with his 9% Benefit increase, while Government offering tax paying workers 5%, surely it should be the other way around, no wonder there’s uproar / strikes and thousands marching.
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