Government is boosting home ownership at expense of PRS, it is suggested
Tenants in private rented housing are bearing the brunt of the Government’s focus on boosting home ownership at the expense of the rental market, according to a landlord organisation.
The Residential Landlords Association points out that the latest figures from the Royal Institution of Chartered Surveyors (RICS) show that there has been a fall in the supply of private rented housing whilst demand from prospective tenants increases and this is ‘likely to squeeze rents higher’.
Tenant demand has picked up despite the Government’s efforts to boost home ownership and RICS notes that many respondents to its latest residential market survey saw a rise in the number of enquiries from new home buyers in July.
Over recent years tax changes by the Government, including restricting mortgage interest relief to the basic rate of income tax and introducing a 3% stamp duty levy on the purchase of new homes to rent out, have led some landlords to leave the market.
This is despite the Institute for Fiscal Studies warned that it was ‘plain wrong’ to argue that landlords were taxed more favourably than home owners. The Chartered Institute of Housing has also noted that tax reliefs deliver a much bigger benefit to home-owners than they do for private landlords.
David Smith, RLA policy director, believes that these figures demonstrate that hitting the private rented sector to boost home ownership serves only to hurt tenants. ‘Demand from tenants and new buyers is increasing at the same time. It is vital that the needs of both groups are met,’ he said.
.The Government needs to stop making landlords the scapegoat for the housing crisis and embark on a raft of pro-growth measures to boost the supply of homes for the private rented sector. If they do not, supply will continue to fall, meaning higher rents, less choice, and a reduction in quality for tenants,’ he added.