Give the current state of the housing market, Lord Flight has urged the government to ‘recognise the important part it must play in solving the housing crisis’. His theory behind the statement is the introduction of a number of measure, most notably the stamp duty surcharge, will lead to a mass exodus and pour more pressure onto an already stretched private rented sector.
His article reads: ‘The biggest domestic issue of our times is the high cost of housing in the UK both pricing the younger generation out of home ownership and driving up rental costs.
‘Yet, since 2015, the private rental market has faced an onslaught of tax hikes, restricting mortgage interest relief to the basic rate of income tax, putting a premium stamp duty levy on the purchase of new homes to rent; not extending the 20% rate of capital gains tax to residential property and taxing a landlord’s turnover rather than profit, unlike any other business sector. The rationale for this assault on largely individual landlords was to shrink the private rented sector and so expect to increase the supply of homes available for potential home owners. It is, however, a nonsense to blame private landlords for the housing crisis – rather the large increase in private rented properties over the last decade has alleviated the shortage of residential accommodation.’
Lord Flight also goes on to suggest a healthy housing market includes BOTH a strong, growing home owner sector as well as a strong, growing private rented sector. This cannot be achieved when 69% of landlords surveyed by the Residential Landlords Association (RLA) say they will not consider re-investing into the property market ‘largely as a result of the punitive stamp duty levy they now face’.
Lord Flight would like to see:
- Scrapping of stamp duty surcharge
- Introduction of tax incentives for landlords prepared to offer longer term tenancies
- Provide landlords with capital gains tax relief if they sell a property to a sitting tenant to become a homeowner
What do you think about Lord Flight’s suggestions? A return to a more positive set of housing market policies would certainly be most welcomed by the majority of the country and would most certainly improve the economy in a time where it needs a boost.
For more information and advice on becoming a landlord, call Witlet on 01376502500 and discuss your ideas with us on a free, no obligation basis.