An agency chain is urging the Tories to stop in-fighting at their party conference and instead increase supply in the private rented sector by bringing back mortgage interest relief for landlords.
On the latest episode of Winkworth’s The Property Exchange podcast, chief executive Dominic Agace says: “The most acute structural problem is in the rental sector. It has become caught up in electioneering.
“We are seeing rent rises in London of 15 per cent this year, with 10 per cent forecast next year. The lack of supply is caused by increased intervention by the government and tax changes.
“A healthy rental sector is crucial to the success of a city to attract young professionals. We are hearing stories of families squeezing into smaller properties because that’s all they can afford. We need people to be able to be where they need to live for work in a place that’s suitable for them.
“There is a move towards build to rent properties, which are institutionally owned, but these are not available yet to meet the current demand. We need the government to take some quick action and reverse the tax measures to encourage landlords.”
He adds: “In-fighting has caused housing targets to disappear, manifesto pledges of 300,000 homes a year and national planning frameworks have all been watered down. Local authorities have been hollowed out through a lack of investment, with planning officers regional rather than local. Complex legislation, which leads to a longer planning process all results in delays to more home building. We need to simplify to allow more access locally to build more suitable properties.”
Adam Stackhouse, Winkworth's managing director of developments and commercial investments, tells the podcast that a planning enforcement team should be introduced immediately to increase supply.
He comments: “A joint team from the private and public sectors could be parachuted into local authorities to fix these problems, with a 90-day turnaround time, to look at planning applications stuck on the shelf. The government should deliver incentives that offer up a fair land value.
“Housebuilders don’t like sitting on land, they like to build. There is also an incredible shortfall in the social housing sector, with only 33,000 properties constructed in recent years, with a waiting list of more than a million.”
The Tory party conference begins on Sunday.
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We need mortgage interest to be fully tax deductable.
We need eco upgrades to be fully tax deductable.
We need CGT taper relief so there is a viable exit route eventually. Very few young people will enter the industry while CGT is at such extortionate rates. We are already prevented from contributing meaningful amounts into a SIPP as our income is considered to be investment not earned!!???? That denies us the tax relief everyone else enjoys. Other countries have zero CGT after a certain period of ownership. This encourages long term stability in the PRS while accepting even landlords want to retire at some point.
Well said Jo.
Unfortunately politicians want their cake and eat it. They want to get rid of PRS due to populist sentiments of a few but also want PRS to take the brunt of lack of housing built.
Gov want to reduce the overall size of the PRS, retain sufficient only to house those who cannot house themselves, because the PRS does this far more cost effectively than social housing. In addition they want to ‘ lock us in’ with punitive taxes and regulatory obstacles including the likely future use of eviction bans.
In summary, they want the PRS to house low income - benefit dependent folk from cradle to grave and all on the cheap.
We also need the Renters Reform Bill to be scrapped.
If the government wants a good private rental sector with reasonable rents they will reverse all the measures designed to reduce the number of landlords - not only punitive Section 24 but 10% wear and tear allowance should be brought back.
Capital gains tax should reduce to 0% at age 66 (or whatever the retirement age will be) so that landlords can retire like everyone else.
AJR - I agree but I refuse to touch the people they want me to house - I would sell up before I went down that route - I suspect many other Landlords will feel the same - I am sure I saw a publication recently that said we have the highest number of people in B&B temp accommodation since records began. I warned our local council this would happen a couple of years ago and told them I hoped they had a healthy budget for temporary accommodation as they were going to need it - needless to say they did not believe a word I said.
It is wilful blindness on their part, Catherine, in my opinion.
@Ellie Edwards - when it was announced the RRB was def on the table I watched the market and did my own audit - at that point for 1-3 bed houses less than £300k between 30 to 37% of houses that went on market for sale were ex rentals. In addition a number of ex HMOs were put on market. I specifically told Sam Chapman Allen Head of Breckland Council and CEO of District Council Network they were being sold as they would be impossible to manage without S21 and they basically said - prove it! Now if I advertise a house I am inundated with applications from migrant workers employed by a local poultry company who would previously lived in local HMOS and now have to travel a 60m round trip from Aylsham in Norfolk to work at a min wage job. Last time I advertised a 2 bed house had over 50 applications in a couple of weeks. Have given a summary of the current state of the market and proof from HMRC CGT figures that LLs are selling to George Freeman MP but it falls on deaf ears. I will continue to keep battering them with data and I only hope it will get so bad at some point they have to reassess?
Everything you said about the HMOs came to pass and you have had first hand direct experience of the situation.
The problem for us is that they may be wanting us to sell or house the destitute who want permanent accommodation in the private rental sector which is paid for through local housing allownce.
Their problem for them is that we are not pawns who can be manipulated by unfair legislation; we will find our own solutions.
@Ellie Edwards - it is like the legislation banning no DSS advertising - if you have applicants running into 50+ as a Landlord you pick someone who does not have DWP on their bank statement and a regular paycheck. As you say we find our own solutions and they find a bigger taxpayer funded bill for B&B.
People will only provide a service if it is worth their while. If you make it too difficult to carry out business, then people will shift their money elsewhere. Populist Government knows exactly what it is doing and has turned its ire on an easy target that struggles to hit back. Eventually when it all goes to pot, somebody will write a report detailing all the mistakes that were made and try to find a solution to the mess. Unfortunately this will likely involve huge amounts of taxpayer money that they don't have.
I'm 55 and I wrote to my MP a while ago pointing out that I could just sell up all my property and would be fine for the rest of my life with zero hassle, but it would be a different story for all my tenants. I never got a reply.
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