The Residential Landlords Association has asked the Government to reconsider the way landlords are taxed after a report from the Resolution Foundation claimed 16 per cent of young people will never own their own home.
Responding to the report RLA policy director David Smith said Government needs to focus on pro-growth taxation policies to help landlords provide the extra homes to let that are needed.
“The report shows the perfect storm that young people face. With home ownership remaining difficult for many to access, demand for homes to rent continues to increase. This is at a time when Government tax increases are discouraging many landlords from investing in new homes to rent out.
“Ministers need to make pragmatic changes to their approach to private rented housing, with a series of policies that support, rather than attack, the majority of private landlords who are individuals to invest in the new homes to rent we need alongside all other tenures.
“This includes greater support and encouragement for those prepared to offer longer tenancies but who are concerned about being locked into agreements where tenants might be failing to pay their rent, not looking after their property or committing anti-social behaviour.”
Surveys by the RLA’s research arm PEARL found 69 per cent of landlords are put off investing in further homes to rent as a result of the Government’s three per cent stamp duty levy on the purchase of homes to rent out. The RLA is calling for a number of reforms to support those in rented housing, including:
- Waiving the stamp duty levy where landlords invest in property adding to the net overall supply of housing;
- Using a combination of tax incentives and improvements to the process for regaining possession of a home where tenants are neglecting it or not paying the rent (73 per cent of landlord have told the RLA that they would be encouraged to offer longer-term tenancies if such reforms were made);
- Action to stop mortgage providers from prohibiting landlords from offering longer tenancies (44 per cent of landlords have told the RLA that they have mortgage conditions that limit the maximum length of tenancy that can be offered);
- Establishing a new housing court to improve and speed up access to justice for tenants and landlords when things go wrong; and
- Providing relief from Capital Gains Tax where a landlord is prepared to sell a property to a sitting tenant to support first time home ownership.
By Patrick Mooney, editor