Conservative plans do nothing to address shortage of homes to rent
Following the launch of the Conservative Party’s 2024 general election manifesto, the NRLA has issued its response to the document’s various proposals for the housing market.
Key amongst the draft policies set out in the document is the party’s pledge to introduce a temporary two-year relief on Capital Gains Tax (CGT) for those landlords who sell their rental property to tenants.
Separately, the manifesto also states that a future Conservative government will “pass a Renters Reform Bill that will deliver fairness in the rental market for landlords and tenants alike”.
Responding to these proposals, Ben Beadle, Chief Executive at the National Residential Landlords Association, said:
“Tenants who want to become homeowners should be supported to do so. Whilst incentivising landlords to sell to existing tenants has the potential to help, it will not reverse the damage to the rental market caused by tax hikes under recent Conservative governments.
“As the Institute for Fiscal Studies has warned, changes to mortgage interest relief and the level of stamp duty paid by landlords have led to higher rents and stifled the supply of homes across the private rental market. This comes at a time when the number of tenants enquiring about every available rental property has more than doubled compared with before the pandemic”.
Responding to the Conservative Party’s pledge to end section 21, ‘no explanation’ repossessions, Ben Beadle continued:
“Reform of the rental market should have taken place in the last Parliament. As we said then, a balance between security for tenants and policies which retain the confidence of responsible landlords is crucial if we are to deliver much-needed homes for rent.
“That balance can only be achieved by fixing a broken justice system so that tenants and landlords can enforce their rights when section 21 ends in a timely and effective way. As the Law Society has warned, reform risks being ‘in vain’ without investment in legal aid support and the courts.”
If you would like to read the manifesto document in full, click here to read it in its entirety.
-ENDS-
Notes:
• In January Paul Johnson, Director of the Institute for Fiscal Studies, wrote:
“Note what an extraordinary amount of stamp duty is paid not on owners’ primary residences but through the higher rate payable on additional properties — about half the total. An additional 3 per cent is payable over and above the standard rates. It’s an additional 6 per cent in Scotland. Again, politically, cutting these rates won’t look attractive, landlords generally are not top of the list when looking for popular tax cuts, but, again, we need to look harder at the actual impact of these taxes. They limit the number of properties available for rent. They therefore raise the prices faced by renters. The taxation of rental housing more generally has become increasingly penal.”
He continued:
“The more harshly that landlords are taxed, the higher rents will be. One of the reasons that private rents have risen so much is that government policy has substantially increased tax payable by private landlords. Even more than the price of owner-occupation, high rents in and around London and other thriving cities prevent young people moving from elsewhere to take up well-paid, highly productive jobs.”
Paul Johnson concluded:
“It’s not hard to make the system better. Reduce the stamp duty surcharge (ideally, abolish it), end the restrictions on mortgage relief and reform capital gains tax so that it is charged only on any real increase in value. Do all that, not forgetting abolishing stamp duty on primary residences and raising council tax on more expensive properties, and you won’t fix the housing market — that will need a lot more reform, not least of the planning system — but at least you’ll be taking some steps in the right direction. If the chancellor is looking for tax cuts, these are some ideas that he should be considering. Who knows? Maybe the OBR would even forecast a small increase in economic growth as a result.”
His article can be accessed here.
• Zoopla’s recent rental market report notes:
“Competition remains high, with 15 households chasing every rental home. This is more than double the pre-pandemic average of just six which was seen between 2017-2020.”
The report can be accessed here.
• The Law Society said of the Renters (Reform) Bill which sought to end section 21 before the election was called that: “without investment for housing legal aid and the courts, the bill will not achieve its aims and may lead to an increase in backlogs and landlords and tenants alike will be unable to enforce their legal rights.”
See here.
The President of the Law Society has warned that reforms risk being “in vain” without investment in the courts and housing legal.
See here.
• Further information about the NRLA can be found at www.nrla.org.uk. It posts on X @NRLAssociation.
• The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.
