Private landlords are asking for tax breaks to help keep rents low and increase the number of available homes. They sent a letter to the Chancellor before the Budget, explaining that they need stability and clarity to address the shortage of homes. The National Residential Landlords Association, Propertymark, Goodlord, and Large Agents Representation Group signed the letter. They want the government to reconsider how they tax the rental housing sector. Paul Johnson from the Institute for Fiscal Studies mentioned that the current taxation on rental housing is making rents go up.
However, there is a concern that the government might increase capital gains tax, which worries landlords. The letter suggests abolishing the 3% stamp duty levy on homes purchased for rental if landlords refurbish the over 250,000 long-term empty homes in England. This would encourage owners to sell these properties, especially when over 115,000 households are in temporary accommodation. They also recommend removing the levy for landlords who invest in projects that increase the housing supply, like purchasing new-build properties or converting empty shops or offices into rental units.
The letter also calls for the local housing allowance to remain at least at the 30th percentile throughout the Parliament to provide certainty for tenants and landlords. Landlords feel that they are in a precarious position due to factors like the Renters’ Rights Bill, which will abolish “no-fault” evictions and other protections for tenants. They also want a clear plan for the government’s energy efficiency improvements in rented homes and uncertainty over local housing allowance rates.
While the government is working to increase housing specifically for rent, landlords believe this is not enough to solve the sector’s challenges. Build-to-rent completion rates have improved, but they are not keeping up with the rate of landlords leaving the sector. Data shows that 1,000 units are completed each month in the build-to-rent market, but more than 5,000 homes are being sold each month that were previously rented out. Build-to-rent units are also rented at a higher price compared to the wider rental market, with average monthly rents at £1,840, which is 10% more than high-end properties.
In conclusion, private landlords are facing uncertainties and challenges that are affecting the rental market. The call for tax breaks and other measures to increase housing supply and stabilize prices is essential to ensure that both tenants and landlords are supported. The government’s response to these requests and the upcoming Budget decisions will have a significant impact on the rental market’s future.
