Taxation hurts tenants by turning landlords to AirbnbMake Text Bigger
Tenants, including many with children, are finding it harder to access long term homes to rent as Government policy is driving landlords to move into the holiday lettings market, says the leading landlords’ organisation.
The warning comes as figures published today show that Airbnb accommodation now accounts for one in every four property listings in some parts of the country. This follows a study published by ARLA Propertymark which found that nearly half a million properties could be left unavailable for longer-term rent as more landlords exit the market in favour of short-term lettings.
According to the Residential Landlords Association, which has been campaigning on the issue since 2016, one of the main reasons for this is the change in the taxation of landlords which is driving many landlords out of the long-term sector. The full impact of the restriction of mortgage interest relief to the basic rate of income tax applies from April, making many landlords significantly worse off or even unable to make a profit on their lettings. This change does not apply to landlords with short-term lets so encouraging long-term landlords to move into that market.
There is mounting evidence that this, along with the 3% stamp duty levy on the purchase of extra housing and other measures affecting landlords’ confidence, is causing a drop in the supply of long term rented homes when demand continues to increase.
David Smith, Policy Director for the Residential Landlords Association, said: “Government policy is actively encouraging the growth of holiday homes at the expense of long-term homes to rent which many families need. This is completely counterproductive, making renting more expensive and undermining efforts to help tenants save for a house of their own.
“The Chancellor must use his Budget to give tenants a better deal by supporting good landlords to provide the homes to rent that they want to live in.”
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