The UK housing white paper, announced by the government today, has been branded “hypocritical” by one landlord.
The government delivered its proposals to fix the country’s “broken” housing market today, announcing a string of measures designed to boost construction levels across the country, both for homeowners and for renters.
The focus on institutional investment in build to rent developments is welcomed by the property industry, but it arrives at a time when the government is also introducing a string of measures for landlords that will leave many with no other option but to raise rents, making housing more unaffordable for tenants in the short-term.
David Cox, Managing Director of the Association of Residential Letting Agents, says: “ARLA welcomes the Government’s plans to encourage more institutional investment to boost the number of properties available for rent. Any proposals that increase supply should be applauded. However, this approach should not be at the expense of small landlords who make up the bulk of the private rented sector. Experience has shown that, even in countries where institutional investment in the PRS has been encouraged, it still only makes up a small part of the sector. Small landlords are vital to the health of our rental sector.”
Steve Bolton, Founder of Platinum Property Partners, who led a legal challenge last year against tax changes that will be phased in from April 2017, levying landlords on their revenue, rather than their profit, comments: “Improving property supply – both in the homeowner and rental market – is key if we are to slow rising house prices and rents. Yet, while the Government commits to increasing the availability of homes in this white paper, buy-to-let tax changes due to come into effect in a matter of months threaten to seriously derail investment in the rental sector.
“The proposed tax changes will hit private landlords’ profitability and inevitably cause some to leave the market altogether, restricting the number of rental homes available. How can the Government say they are committed to improving homeownership and reducing rents while simultaneously introducing a Tenant Tax that will only result in higher rental costs, and therefore making it harder for people to save for a deposit? All the good thinking in today’s white paper is completely derailed by this hypocritical approach.”
“According to the white paper, almost two thirds (65 per cent) of private tenants are happy with their tenure, compared to 48 per cent in 2004-05,” he continues. “It’s clear that landlords are providing an essential service – yet they are being squarely punished for it. If the Government truly wants to improve homeownership levels, and make renting more affordable for all, they need to abolish this ludicrous tax change sooner rather than later.”Google+