Holiday lets – The government chickens are coming home to roost

Holiday lets – The government chickens are coming home to roost

14:03 PM, 29th June 2022, About 2 months ago 8

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Responding to the publication today of the Government’s review on short-term holiday lets, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“The growth in holiday lets is a direct consequence of the Government’s attack on long-term rented housing.

“Tax policies actively discourage long-term investment in the private rented sector by landlords. With a Housing Secretary that wants to shrink the size of the sector, it is little wonder many landlords have jumped ship to the holiday lets market.

“As a result, for many in holiday hot spots finding a long-term home to rent is all but impossible. With demand for such housing at a record high, all it is doing is increasing rents when tenants can least afford it.

“The Government needs to end its anti-landlord attitude and develop pro-growth tax plans to help renters access the housing they need.”



Comments

Richard P View Profile

14:40 PM, 29th June 2022, About 2 months ago

One of the other issues that was recently highlighted to me is the lack of available local labour to service these short term and holiday lets due to the lack of permanent local home rentals and property that is affordable.
This is applicable in most holiday areas in the South West as well as the North East. No doubt elsewhere in seasonal and other popular tourist areas especially.

Martin Thomas

16:14 PM, 29th June 2022, About 2 months ago

Well said NRLA. This government is so anti landlord and pro big business landlord. Is someone getting a backhander?

northern landlord View Profile

17:09 PM, 29th June 2022, About 2 months ago

Don’t the NRLA ever read the sites landlords post on? According to them the main reason landlords are getting out or converting to holiday lets is “Tax policies actively discourage long-term investment in the private rented sector by landlords” This is a factor for those thinking of becoming a buy to let landlord so is a bar to entry. However, many landlords are older and now own their properties outright having paid them off or inherited them. They are leaving? Why? Because of all the existing and proposed legislation coming down the line with potential huge fines if you make a slip up. Banning section 21 and AST’s, as is sure to happen will mean that landlord’s will lose control of their property. The EPC regulations if they do come in will just encourage more landlords to sell up. The houses that need a fortune spent are older terraced houses charging the lowest rents to the poorest tenants. If you are charging around £500 month for a 2 bed terrace (we are not talking London here) and suddenly need to spend £10,000 or more to upgrade (or to get an exemption) selling up becomes an attractive option for the older owner landlord. These houses won’t be sold to the tenants as they can’t afford them, they will probably go to first time buyers. As for the displaced tenants, perhaps seedy HMO’s in the rogue landlord sector or maybe Shelter will live up to its name and house some of them. They bash landlords with no appreciation of the problems they can face.

DSR

8:51 AM, 30th June 2022, About 2 months ago

Reply to the comment left by northern landlord at 29/06/2022 - 17:09
agree. When NRLA state simply that S24 is the biggest issue, then its looks like a lot of LL's bleating about paying more tax.
The reality is far deeper than this. Its about erosion of LL own rights over the use and rental of their own property. It's NOT about LL v Tenants.

ALL landlords are responsible for ensuring clean, safe homes etc - no dispute here and of course there should be standards that underpin this.

BUT

The NRLA continue to side with the government and cow-tow to proposals that fundamentally go much further than this and undermine the whole basis of renting out a property, by agreeing with policies then trying to 'mediate' solutions for LL's. This is not acceptable - it is NOT representing LL's BUSINESS interests at all.

We are a necessary industry providing a business solution to a national need.

Bristol Landlord

17:14 PM, 30th June 2022, About 2 months ago

A controlled opposition is a protest movement that is actually being led by government agents. Nearly all governments in history have employed this technique to trick and subdue their adversaries. Notably Vladimir Lenin who said ””The best way to control the opposition is to lead it ourselves.”

Controlled opposition, misinformation and disinformation sounds like Shelter and Gen Rent and being used against tenants and landlords ……. could it be NRLA is also controlled? It’s starting to look that way to me.
Also bear in mind the age old Government strategy of Divide and Conquer, sounds like Tenants and Landlords being deliberately set at each other’s throats.

Blodwyn

11:11 AM, 2nd July 2022, About 2 months ago

As ever, wrong target and inevitable unforeseen consequences? I pinch myself to remember that Shelter is not the governing Party and John McDonnell its Prime Minister with Corbyn as Chief Housing Minister?

Rod

12:49 PM, 2nd July 2022, About 2 months ago

The PRS are hardly the only sector to be in the unfortunate position of being on the receiving end of increasing regulation (think catering - allergies, calories, etc)
- some of it much needed to set best practice (smoke, fire, gas, electric, deposits) some for political purposes (right to rent, Article 4, additional licencing), much of it poorly drafted, requiring several court decisions before a workable solution is eventually defined (gas certs)
Let's not forget that this week the Climate Change Committee criticised the Government for "a shocking lack of commitment" on climate change and failure to provide initiatives to insulate homes, despite the fuel crisis.
Yes, it seems unbelievable that when George Osborne chose to play politics with the PRS, landing landlords with premium tax rates on their property purchases (3% SDLT surcharge), rental income (S24) and gains (8% higher CGT for residential property), he did not anticipate that landlords and other investors would take advantage of the more beneficial tax treatment for furnished holiday lets (FHL), given that the "Airbnb" market was already diving up city centre rents.
The direction of travel for PRS landlords has already been determined in Whitehall:
- Rental Ombudsman
- Landlord Register
- All Rental Properties inspected and registered
This is a clueless government, run by a clown with big ideas, lots of promises, but no plans for their delivery.
The best we can do is hope for a change of leadership, while we highlight the unintended consequences of both the current situation and proposed renters reforms.
Like many, I have taken advantage of the FHL position on some of our city centre properties. These are properties, which would have been let to one or two professional tenants, which instead have provided better quality accommodation for contractors and tourists than many of the local tired hotels. Whilst this may have impacted local housing costs, at least cities have a larger, more diverse housing stock with adequate public transport for those unable to live in their preferred location. The same cannot be argued for smaller coastal or rural locations, which has led to the much reported hollowing out of these communities.
Running properties as FHL certainly takes more effort and other inputs than the average rental, including most HMOs, but the benefits of higher profitability while retaining control of your property, and not being subject to S24 cannot be overstated.
The removal of small business rates relief will not make a significant difference to these operators.
Given that we are moving towards a PRS where only licenced properties can be let (long or short term) a potential solution could be for any FHL operator to already have a registered long term let in the town/local area on a one-for-one ratio for each FHL This would be a more balanced solution than outright bans, which would choke off new investment, as well as seasonal income for businesses servicing these properties.

Heather G.

15:38 PM, 7th July 2022, About a month ago

Reply to the comment left by Rod at 02/07/2022 - 12:49
"The best we can do is hope for a change of leadership" - Ta Da!

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