The chief executive of a short lets service says Chancellor Jeremy Hunt is wrong to think penalising landlords will help solve the housing shortage.
Hunt’s Budget last week abolished the Furnished Holiday Lettings tax regime which gives extra tax reliefs for costs incurred furnishing holiday lets that aren’t available to private rentals. This was done - so the government claims - to remove the incentive for landlords to offer short-term holiday lets rather than longer-term homes.
Charlotte Thursfield of the SevenStays short lets platform says scrapping the current holiday lets tax regime will simply add yet more pressure to holiday let owners who are already feeling the effects of high mortgage rates and energy prices.
And she insists this will have little impact on the key issue in the private rental sector: lack of supply.
“The tax breaks made short term holiday letting a viable alternative to renting to long term tenants and scrapping these benefits is unlikely to make any noticeable difference to the supply of long-term rental properties in the UK” she says.
“Whilst we understand concerns from locals looking to rent properties in coastal holiday let hotspots such as Cornwall, 5.7% of properties in the South West alone are classed as vacant (meaning there are no usual residents living there with no indication of it being used for short term lets) and a crackdown on these properties would have had more of an impact on available supply for locals in these areas.
“Likewise, the government’s failure to address the estimated 1.4 million vacant properties across the UK and build enough housing to meet demand has meant that holiday let owners are left feeling the pinch and this may encourage more landlords to leave the market altogether.
“Ultimately holiday lets help drive a big portion of local economies through tourism and their value has been somewhat overlooked.”
In addition to Jeremy Hunt tightening tax on holiday homes in last week’s Budget, Housing Secretary Michael Gove also wants to clampdown on short lets.
Gove proposes:
- planning permission will be required for future short-term lets;
- a mandatory national register;
- homeowners can continue to let out their own main or sole home for up to 90 nights a year;
- unspecified proposals which he says “will give communities greater control over future growth”.
Under the clampdown councils will be given greater power to control short-term lets by making them subject to the planning process.
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He’s just another wef puppet along with all the rest , voting is a total waste of time
Lining their own pockets and selling the country down the river
So if there’s 1.4m vacant properties it’s because of the stupid attack on landlords too scared to let and unacceptable regulations.
Ok they won’t all be habitable but most of them will, what owner wants their property empty none can the Government and all the anti landlord brigade not see this.
Everyone loosing out the landlord, the government, the revenue and it least the Tenants.
Still they’d rather despise landlords with totally unnecessary Regulations like The Renters Reform Bill, The license Schemes and the Removal of Section 21 the basis of all Private Letting.
Hundreds of thousands of landlords have sold up because of those Regulations and the constant attacks on them and the raid on their finances, can government not see this or is it what they want to happen (must be).
A pet is for life, not just for Christmas. The government see renting in the same way. They want all rental housing to be permanently dedicated to tenants, hence the relatively favourable regime for company buy to let structures.
My central Manchester apartment was vacated by the tenant 2 years ago. I have never put it back on the rental market, preferring to keep it empty for my own use when in the UK. No way will it be let again and my other properties will be sold off as they become vacant.
No doubt the HMRC will benefit greatly from the sales of landlords properties, as they have almost abolished the reliefs we can claim when selling up.
We all know it’s not going to have the desired outcome, but they are desperate 🆘🆘 tinkering whilst Rome burns 🔥 and the Titanic sinks 🚢 in the Mediterranean Sea 😂😂. As I have said before, we will NOT be left alone, landlords need to make decisions based on this premise.
I won’t be going back to BTL. I’ll just keep ticking over what I’ve got and gradually sell them off. I’ll keep my holiday let’s that still make a bit of money but again I’ll gradually move my cash in to cash ISA’s. Where they will contribute nothing to the economy.
Important stat we should all be sharing … 50% of private owned properties have two or more bedrooms unused. In the private’s rented sector it’s only 16%. We don’t have a housing crisis … we have a housing usage crisis!! The government should be encouraging BTL as it creates more housing for people not less and they should be penalising home ownership not being correctly used, for example why does a single person living in a 4 bed house get a 25% council tax discount??? They are the real cause of the housing usage crisis!
I see your point, but that is one of the basics of a capitalist society, if I wish to buy outright my 4 bed detached house and live in it alone, that is exactly what I can do. No-one should be saying anything different unless they like Russian or North Korean food.
Under used rooms within larger houses is another result of government regulation and taxation creating unintended consequences. The massive stamp duty bill that would typically be payable when an older home owner downsizes, puts many people off.
A number of years ago, I changed jobs the new role was a 1hr 30min each way commute. We considered relocating, but when we added up all the costs of SDLT, estate agent fees, movers costs etc it did not make financial sense, SDLT being the lions share of the costs. Given that I had a fully expensed Company car I commuted on a return journey of 3 hour every day for seven years, again the unintended consequences of government tax policy getting in the way.
We are going down a slippery slope if we are not allowed to live in a house with spare bedrooms or the size of house we live in dictated to us! Population growth is the real problem and not enough housing being built.
Simon / Margaret my point is that it makes no sense punishing landlords who have a higher occupancy and at the same time incentivising others to live in large houses alone. I agree it is a persons right to do with their property what they like but also recognise that that’s a privilege and privileges at the expense of others, as it is in this case, should not be incentivised.
Instead give incentives to downsize and unlock bedrooms and also go further to encourage people to take on lodgers and encourage landlords back because for every 10 properties that transfer from privately owned to BTL 7 bedrooms get used for their proper purpose. It’s just maths!
I used to have a number of holiday lets in Yorkshire, which a disposed of over 16+ years ago, I found short terms holiday letting too much hassle, constantly having to manage cleaners, maintenance work to keep them up to standards and was redecorating / refurnishing each property on a 3 to 5 year cycle. I reinvested the money in long term BTL property.
Over the last 2 years I had been planning to buy additional long term BTL property to add to our portfolio, as a long term 10+ years investment, this would add to the property we already have had for over 16+ years. However the possible introduction of the RRB, the loss of section 24, high mortgage costs, the ever increasing regulation, gas safety, electrical safety, EPC, right to rent paperwork, deposit registration paperwork, council licensing schemes, council tax on void periods, the fear of not being able to evict non paying / problem tenants, has stopped us making any further BTL investment in short or long term rental property.
If the government and councils want more long term rental property to be available, they need to stop the LL bashing, stop the tax grab and reduce the costly ever increasing burden of regulation on LL's. LL's may then get the confidence back to invest which would boost the property market and increase rental property supply. Its really not very difficult, its too much government medalling in the market that the root of the supply problem.
Bruce; You speak for 10's of thousands of us who feel the same. Great post.
"Encouraging" (aka forcing) landlords to sell up IS the goal.
The chances of me rebuilding a BTL business is as probable as donating my kidneys to a donkey!
This government has been taken over by authoritarian morons, who actually think they actually know our motivations.
They play financial ‘Kerplunk’ until it crashes, then we vote back in a fresh bunch of academics, who can’t even see that the same rules have applied since commerce was invented.
If you destroy the suppliers of your stock, you’re at the mercy of the carpetbagger’s, ie: banks, hedge funds and foreign investors.
Which is the position we are in right now.
YET MORE discrimination injustice and hate crime from these gangsters and criminals, no amount of damage will ever be enough
Dominic. Agree Capital Gains should be on a reducing scale say after 15/20 years it should be zero , not increasing every year as now locked in and no exit plan allowed, punishing long term landlords that are the backbone of the business.
Unfortunately, this will probably never happen, as the 'tax take' on properties that have been owned for years is far more substantial than a recently acquired property.
CGT on my oldest property that I have owned for over 30 years, would be massive, as I paid very little for it at the time.
That has influenced my decision to keep it, despite being asked if I wished to sell.
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