Lending giant urges support for landlords in the Budget

One of the UK’s largest buy to let lenders, The Mortgage Works (TMW), has called on the government to use the Spring Budget to introduce four key actions that will help the private rental sector.

TMW, which is part of Nationwide, said that many landlords are facing difficulties due to increased regulation and taxation, as well as higher interest rates.

This has, the lender says, reduced their incomes and their ability to invest in properties, leading to higher rents and lower standards for tenants.

The struggles that landlords face have also hindered their efforts to make their homes more energy efficient.

‘Landlords are a partner for the private sector’

Damian Thompson, a TMW director, said: “Landlords are a partner for the private sector and the government in driving the economy forward.

“The private rental sector provides homes for where the UK workforce is needed most.

“However, the current taxation system is counterproductive, hampering progress within the UK economy, and negatively impacting tenants and landlords.”

He added: “Without the Government permitting landlords to offset mortgage interest against their rental income or making equivalent interventions, tenants will face reduced choice, increased rents and potentially less well-maintained homes, and the UK economy will suffer as a result.”

TMW is asking the government to support landlords

The Mortgage Works is asking the government to support landlords in the following ways:

• Moratorium: A moratorium on all but essential new regulation in the private rented sector following the introduction of the Renters (Reform) Bill. TMW says that landlords have been overwhelmed by a barrage of regulatory changes in the past decade and is urging the government to complete the passage of the Bill through Parliament and then provide a period for these changes to be implemented. It adds that a moratorium would provide certainty for landlords and allow the government to assess the impact of the Bill on improving the sector. This would also allow landlords to focus on providing quality homes for their tenants.
• Incentivise efficiency work: TMW says that failing to incentivise landlords to make their homes more energy efficient is leading to increased energy consumption, negatively impacting tenants. It is urging the government to allow energy performance improvements to be deductible against rental income for tax purposes. This would help make energy performance investment more attractive for landlords and benefiting tenants.
• Funding for social housing: The lender says it recognises that for many people, particularly the vulnerable, would benefit from affordable social housing. The government should ensure appropriate funding is available to deliver the extra 90,000 homes per year, as recommended by groups including the National Housing Federation, to relieve pressure on the PRS and support those most in need.
• Mortgage interest relief and landlord taxes: TMW said it is calling on HM Treasury to review the impact of the scrapping of landlord mortgage interest relief, with the aim of reintroducing this financial support to retain landlords in the sector if they are thinking of selling due to other cost challenges. As well as reviewing the additional 3%, landlords must pay on top of their normal stamp duty payment, this cost acts as a barrier to new landlords entering the market, which would provide more properties. A review of the surcharge, including an analysis of its impact on the supply of private rented housing, should be undertaken to assess its impact and set a future direction.