Landlords respond to reports of holiday lets tax raid
The NRLA has issued commentary to media in the wake of a report in the latest edition of the Sunday Times suggesting that the Treasury may be about to announce the abolition of the UK’s furnished holiday lets (FHL) system.
These measures are, according to The Sunday Times, set to be announced in the 2024 Budget, and will seek to raise £300m of revenue to fund a 2p cut to personal taxes.
The NRLA’s statement calls on the Government to introduce pro-growth measures which will encourage greater investment in long-term lets by private landlords.
In his response to The Sunday Times’ initial report, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“The Chancellor needs to address the chronic shortage of long-term rentals by attracting new landlords to the market. Squeezing holiday lets is not the answer. He should follow the advice of the Institute for Fiscal Studies and reverse punitive tax hikes which have stifled the supply of the homes renters desperately need.
“Scrapping the stamp duty levy on the purchase of additional homes would see almost 900,000 new long-term homes to rent made available over the next 10 years. This would lead to a £10 billion boost to Treasury revenue as a result of increased income and corporation tax receipts.”
-ENDS-
Notes
• The report on the Chancellor’s plans to increase taxes on holiday-let accommodation can be read in The Sunday Times. Details can be read here.
• There are 11 prospective tenants enquiring about every available home to rent according to Rightmove.
• The demand for long term homes to rent is only set to grow.
- Across the UK, there are forecast to be one million applicants a year to higher education by 2030, up by a quarter of a million today according to UCAS.
- The UK population is set to grow by 6.6 million by mid-2036 compared to mid-2021 according to the Office for National Statistics. This includes net international migration of 6.1 million people. Migrants are almost three times more likely to be in private rented accommodation than the UK-born population according to Oxford University’s Migration Observatory.
- Hamptons has warned that: “Would-be buyers will be forced to rent for longer, unless they have a large deposit and so can take on a smaller mortgage.”
• The biggest drag on the supply of long-term rentals have been tax hikes since 2015 including:
- Restricting mortgage interest relief in the sector.
- A 3% stamp duty levy on the purchase of long-term homes to rent.
• Calls for the Government to change course on the way long term rentals are taxed are supported by the Institute for Fiscal Studies, local authorities and the cross-party housing select committee.
- The Institute for Fiscal Studies has called for these tax hikes to be reversed, with its Director, Paul Johnson, warning that: “The more harshly that landlords are taxed, the higher rents will be.”
- The District Councils Network last year called for the Chancellor to develop policies to “stimulate retention and supply in the privately rented sector” to help address homelessness.
- The cross-party Housing Select Committee has called for a review of the impact of recent tax changes in the buy-to-let market “with a view to making changes that make it more financially attractive to smaller landlords.”
• Increasing the supply of long-term rentals could boost government coffers to the tune of £10 billion.
- An independent analysis for the NRLA by Capital Economics has found that scrapping the stamp duty levy on the purchase of homes to rent would see almost 900,000 new private rented homes made available across the UK over the next 10 years.
- It found that this would boost Treasury revenue by £10 billion as a result of increased income and corporation tax receipts.
• 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.
