Increasing the supply of homes for private rent would boost government finances by £10 billion, says the National Residential Landlords Association.
The assessment follows the submission of NRLA’s proposals to the Government ahead of the Budget on March 6.
Research findings suggest that an average of 11 prospective tenants now make enquiries about every available property to rent.
Independent analysis by Capital Economics also reveals how scrapping the three per cent stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes made available across the UK.
As a result of increased income and corporation tax receipts, Capital Economics’ modelling indicates this would lead to a £10 billion boost to Treasury revenue over the same period. For context, this is the equivalent of almost the entire £11.5 Affordable Homes Programme budget for 2021-26.
The Stamp Duty levy was introduced in 2016 with the then-Chancellor, George Osborne, arguing that it would prevent landlords squeezing out families who want to become homeowners. His reasoning was refuted by the London School of Economics which argued that “nationwide only a minority of sales to landlords involved bids from both types of buyer.”
The NRLA is calling for the Chancellor to scrap the levy at the Budget.
Its views have been shared by Director of the Institute for Fiscal Studies Paul Johnson, who warned in a piece for The Times that: “The more harshly that landlords are taxed, the higher rents will be.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, comments: “The Chancellor needs to pull out all the stops to tackle the housing crisis.
“Growing the private rented sector is not only vital if tenant demand is to be met, but it would also provide a substantial boost to Treasury coffers, enabling it invest in vital public services.
“It makes no sense to discourage investment in desperately needed private rented accommodation. Inaction will only result in more misery for prospective renters.”
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I would love to buy more houses but simply can't make it stack with the current taxation and interest rates.
I know 2 people who are in the process of being evicted due to their landlords selling. In previous times I would have bought suitable properties for both of them. Both are long term, clean living tenants. One coming up to retirement and the other a single mum with 2 children.
One of the landlords is living in rented with her partner and now wants to buy a house with him. As she doesn't want to pay the 3% extra SDLT she has to sell her previous house that she has rented out for 5 years and evict a young family in the process.
Even though the tenant is willing and able to pay an extra £500 a month there is nothing available that she clears affordability multiples on and we can't buy anything that stacks.
The extra SDLT and Section 24 if I buy in my name or higher interest rate on a ltd company mortgage make it impossible.
If SDLT, Section 24 and CGT were all addressed in the budget I would be seriously tempted to expand.
Wonder if NRLA in their submission illustrated their points with practical examples like your excellent ones. Probably not.
Paul Johnson of the IFS usually says a lot of sense: just like in the above article. E.g. when commenting on Budgets and future taxation and spending realities. Good and impartial.
Nice when sense and honesty is so lacking among politicians.
Even with the tax changes, I won't be buying unless S21 is sorted satisfactorily. So my planned small build-to-rent probably won't happen. Not even building it for sale as it would work best with very closely neighbouring rentals under my CONTROL as a landlord, when I can sort any neighbour issues that might occur.
The NRLA should tell the government to retain fixed term tenancies with a reform that makes periodic tenancies 12 months.. 92% of fixed term section 21 evictions are for rent arrears, damage or neglect to the property, anti social behaviour or the landlord needing to sell or move in. The remaining 8% are Disputed complaints.. At least 92% of evictions will continue after the abolishment of fixed term tenancies.. So why reduce rental supply by abolishing fixed term tenancies?
No hope of me expanding but would love to reduce, its tax payers like me that’s subsidises the renter’s you’d love to buy for, why don’t people stand on their own 2 feet and pay their way instead of relying on other tax to keep them.
Yesterday Sunday news paper complaining people can’t get on the property ladder at 50 my goodness what have they been doing with their lives, what rubbish will they come up with next / give them one.
To be fair Michael possibly a few divorced and now finding they have to rent, I am 50 and in the same boat. Luckily I have my portfolio to fall back on if I ever need a place when I return from the Middle East.
A couple of friends who have been through the same thing have taken the decision not to go back into owning and like the flexibility of renting, having the option of handing notice on a property and moving within a month. These are the people who will feel the pain of raising rents and lack of supply.
Either way the issues need to be addressed with supply.
This a very dangerous policy. Whilst there is a barrier to exit in the form of hefty capital gains tax a reduction in barriers to entry (reducing stamp duty) will result in landlords entering the market and margins dropping. This will leave many in a loss situation.
Sec 24 is a far far bigger issue for landlords. Reducing SD alone wont be enough to entice reinvestment.
Rent or buy, there are not enough houses to go round. Whatever is done, unless more affordable homes are built, it is all just shuffling deckchairs.
The lack of control, and recent bad experiences, is why we are reducing our portfolio. Favourable tax changes for us would be at the CGT end.
Sorry. Thats a hard pass from me.
Building more homes won’t make a jot of difference, there are plenty of homes for sale ,don’t see the point in building more homes that people can’t afford its affordability not supply side
Build social housing. It is the council who needs to put their money where their mouth is. Verbal abuse and licensing and taxes are not the answer to bad tenants. Council need to take on these tenants by buying properties themselves and see how they look after bad tenants and persistent maintenance and administration of them.
Social Housing, where most complaints of damp, mould, poor repairs etc originate from.
That's why councils have been disposing of their rental properties because they are unable to manage them properly
I do not profess to be an expert , I am just a Landlord with most of my Tenants now being long term . However most of the experts that produce reports calling for this and that regulation and taxation of private Landlords seem to have an agenda that conveniently ignores the basic facts.
I Landlords should be taxed as any other business not penalised (They are providing Rental Properties with a high satisfaction Rate.)
2 If you tax Private Landlords till they are forced to leave the market . Rent will increase , and supply will will dry up . (which is what`s happening)
3 Government Anti-landlord policies have caused the current problem. (30 applicants chasing 1 rental property. )
4 The Renters reform Bill is the wrong legislation at the wrong time.
5 The quickest way to increase the supply of Rental Properties is to support Private Landlords .
Excellent points, it will be totally lost on our lacklustre politicians. 🤷♂️
We need mortgage tax relief back I'm now losing money no my private BTL.
This is not good for me or the tenant.
Being taxed on all the rent before paying the the mortgage is fundamentally wrong.
I give my tenant six months to leave. selling up. !!
Landlords should be taxed as any other business not penalised.!!!!
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