Landlords call for PRS tax review to solve rental crisis

Landlords call for PRS tax review to solve rental crisis

0:01 AM, 6th February 2023, About A year ago 1

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In a bid to show how serious the current rental housing crisis is, landlords are calling on the government to carry out a review on how the sector is taxed.

The call has been made by the National Residential Landlords Association (NRLA) after a survey revealed that 65% of landlords say that tenant demand for housing in the private rented sector (PRS) had increased in the last quarter of 2022 in England and Wales.

That’s up from the 56% of respondents who reported an increase in demand during the last quarter of 2021.

But, despite strong demand from renters, 30% of landlords say they planning to cut the number of properties they rent out this year.

And if this happens, that would be the highest level of planned disinvestment seen in more than six years, the NRLA says.

‘Impact of the supply crisis in the rental market’

Ben Beadle, the NRLA’s chief executive, said: “From students queuing to view properties, through to benefit claimants who struggle to access homes they can afford, the impact of the supply crisis in the rental market is stark.

“The harsh truth is that the government’s efforts to discourage investment in the sector are working.

“But punitive taxation alongside record demand for rented housing is a disastrous combination that serves only to hurt renters.”

‘Supply crisis we see is entirely Government made’

He added: “The supply crisis we see is entirely Government made and the policies of successive Chancellors have backfired spectacularly – it is time to change tack.

“The Treasury needs to undertake a comprehensive review of the taxation of the rental market.

“This needs to assess the impact recent tax hikes, including changes to Mortgage Interest Relief and Stamp Duty, are having on supply. We then need pro-growth measures to support renters to access the homes they need.

“We encourage all of those with an interest in housing supply to contact their MP in support of our call, making use of the NRLA’s toolkit to help.”

Crisis facing renters in need of accommodation

The NRLA says that the crisis facing renters in need of accommodation follows tax changes aimed at dampening investment in the sector. This has included:

  • Restricting mortgage interest relief
  • A 3% stamp duty levy on the purchase of homes to rent out
  • An effective hike in Capital Gains Tax in last year’s Autumn Statement.

In its submission to the Treasury prior to next month’s Budget, the NRLA is calling for a full review of taxes which impact the sector.

As part of this call to action, the NRLA encourages the Treasury to analyse the combined impact of all recent tax changes on the supply of homes to rent.

Landlord petition is still picking up votes

Meanwhile, a petition launched by Midlands’ landlord Simon Foster to reinstate tax relief allowing mortgage interest to be set against rental income is still picking up support.

The petition now has 32,833 signatures – even though the government has already replied saying that it believes the current tax regime is fair.

Should the petition, which is attracting lots of support from prominent people and organisations in the PRS, reach 100,000 signatures, it could be debated in Parliament.

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19:54 PM, 6th February 2023, About A year ago

I would like to see stamp duty land tax eased/liberalised for Company purchasers so as to guide investors into the incorporation route

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