Chancellor Urged To Help Landlords In Budget

AFS Team·5 March 2020·4 min read
Chancellor Urged To Help Landlords In Budget

Chancellor Urged To Help Landlords In Budget

The Chancellor of the Exchequer, Rishi Sunak, is being urged to use his first budget to help landlords and reverse the decline in the supply of homes for rent.

The call has been made by the Residential Landlords' Association (RLA) and the National Landlords' Association (NLA), who say that the current tax system undermines the government's housing objectives.

They are now calling for a review in the way rental homes are being taxed to ensure that any tax policy will support and not contradict the current government's objectives.

The organisation says that with more landlords selling rental homes than are buying, and with others switching to short-term holiday lets, urgent action is now required to help provide rental accommodation for tenants in the near future.

The landlord bodies say that the 3% stamp duty levy that was introduced in 2016 has led to reduced investment in the sector and landlord confidence is described as being 'extremely low'.

The policy director at the RLA, David Smith, said: "The tax system for rental homes is failing and encourages the provision of holiday homes over long term homes to rent. It deters new housing investment and provides no support to landlords who want to make energy efficiency improvements.

"Ministers should use the budget to change course and help ensure their tax policies are aligned positively with wider housing objectives and encourage good landlords to provide affordable long-term housing."

The NLA's director of policy, Chris Norris, said: "The tax system that landlords must contend with is not fit for purpose. The Treasury is constructing barriers to investment that make running a successful and efficient lettings business borderline impossible."

He added: "We hope that the Chancellor, as he prepares his first budget, will take this opportunity of using taxation for encouraging investment in existing and new homes alike.

"The emphasis must be to find solutions and encourage investing across tenures and amongst a range of providers."

Two-year BTL finance deals reach year high

Meanwhile, it has been revealed that two-year BTL deals have grown in popularity to reach a 12-month high.

The news comes from Mortgages for Business who say that growing numbers of landlords are looking for shorter term rates.

The organisation says that this option became more popular at the end of 2019 in the face of an uncertain political climate.

Now, the proportion of landlords who are opting for a two-year fixed rate has risen from 8% last year, to 26% currently.

However, despite this rise, the most popular term for 68% of landlords is for five-year fixed-rate products.