Propertymark: Row back on tax changes to keep landlords in the market
While there are fears the Renters’ Reform Bill will result in landlords exiting the market – it shouldn’t be looked at in isolation, Propertymark’s head of policy and campaigns Timothy Douglas has urged.
Instead, he feels the government should look into other changes that are disincentivising investment – especially the elimination of mortgage income tax relief – in a bid to keep rental supply up.
As it stands mortgaged investors can only claim a 20% mortgage interest tax credit, as they are effectively taxed on their income rather than their profits.
Douglas said: “In certain parts of the country landlords are exiting the market, while we’re seeing a huge amount of demand from tenants.
“We think the Treasury should conduct an impact assessment on the tax changes and have some evidence-based policies going forward to bring growth and help landlords meet that tenant demand.”
Another factor that could drive landlords out is having to up the EPC levels of properties to C by 2025 for new tenancies and 2028 for existing tenancies.
Douglas acknowledged that improving the efficiency of properties is a positive goal.
However he reckoned the authorities need to provide grants and loans to incentivise homeowners to do the work – especially as the cost cap of £10,000 is very steep in some areas of country in proportion to house prices.
He added: “A one-sized fits all EPC target for all types will mean that if you can’t meet that you will lose landlords and supply from the sector, which isn’t helping demand.
“Surely the focus should be about making each property as energy efficient as possible.
“That way you’d improve the energy efficiency of all housing – rather than losing some stock because it can’t meet EPC targets.”