LATEST: Gove hints at fairer tax rules for landlords in return for more regulation

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Housing Secretary Michael Gove has dropped a hint that he could be willing to consider tax concessions for landlords.

Speaking in the Commons during a Budget debate, he told MPs that the government needed to make sure there was fairness in the tax treatment of landlords before legislative changes were made to the sector, including the abolition of section 21.

He said if there was to be a pipeline of affordable private rented homes, supply also needed to improve, particularly in London, working in partnership with Mayor Sadiq Khan.

He again dismissed the idea of rent controls in England. “A rent freeze, while often attractive, has the effect, as we have unfortunately seen in Scotland, of reducing the supply of rented homes,” said Gove, responding to MP Jeremy Corbyn, who told the House that rising private rents was hitting inner-city areas hard.

“The greed and profit-taking by some private sector landlords continues unabated,” said Corbyn. “If we are to deal with the housing crisis, it means rent control and investment in council housing.”

Holiday lets

The Secretary of State also announced plans to restrict the number of holiday lets as part of new legislation. He acknowledged: “There is a problem in the private rented sector…where homes are being turned into Airbnbs and holiday lets in a way that impedes the capacity of young workers to find a place where they can stay in the locale that they love and contribute to the economy of which they wish to be part.”

Added Gove: “We will be bringing forward some planning changes to the Levelling Up and Regeneration Bill which are intended to ensure that we have restrictions over the way that homes can be turned into Airbnbs.”

Read more about holiday lets.

View Full Article: LATEST: Gove hints at fairer tax rules for landlords in return for more regulation

Manchester students evicted by University after demanding 30% rent reduction

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Manchester students occupying a university-owned building in a protest over rent costs and living conditions have been ejected by bailiffs.

Manchester University says their action was illegal and that it was granted a possession order by the High Court. When the 20 strikers refused to leave, they were forcibly removed.

The students are demanding a 30% rent cut backdated to October, a cap on rent for the next three years, for the university to aim to provide student halls that meet the NUS definition of affordable and for no disciplinary action to be taken against strikers.

“About 250 students were reported to have cancelled payments in January, arguing that they were struggling to buy food.”

The group says: “The university has made it clear that they would rather drag their students out of a building than listen to our concerns.

“The cost-of-living crisis isn’t going anywhere, and neither are we. Occupations are only one of many tactics, and this eviction will not slow down our campaign one bit.”

A university spokesman says its actions follow multiple requests to those occupying the building to leave.

He adds: “We very much regret having to do this, but the situation has been going on for a significant amount of time and has caused ongoing disruption to students and the people who work in the building.”

In a statement published on the university website last month, Patrick Hackett, registrar, secretary and COO, said although it recognised there was a shortage in supply of housing and particularly student accommodation, its costs were very competitive both in the city and across universities.

The strikes will remind many readers of the later months of Covid when rent strikes spread to multiple campuses across the UK.

Picture credits: UoM Rent strike 2023.

View Full Article: Manchester students evicted by University after demanding 30% rent reduction

Bank of England steady the ship with a 0.25% Base Rate increase

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The Bank of England’s monetary policy committee (MPC) today voted by a majority of 7–2 to increase Bank Rate by 0.25%, to 4.25%. Two members of the MPC voted to keep the rate the same at 4%.

The eleventh-hour surprise was yesterday’s inflation figures going up instead of down mainly due to the recent rise in food prices.

View Full Article: Bank of England steady the ship with a 0.25% Base Rate increase

Community Infrastructure Levy fees for small developers?

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Hello, I have planning permission to build a one unit flat on top of an existing building (I own the flat below). I also have all the necessary legal documents with the Freeholder.

I advised the council that the works would start in mid-January –

View Full Article: Community Infrastructure Levy fees for small developers?

Freeholder, Leaseholder – can you be both?

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Hello, After setting up a property development company, my first project was a large extended terraced house. The property was in poor condition and I was fortunate enough to buy it cash. I was granted permission to convert it into two flats which I intended to keep and rent out.

View Full Article: Freeholder, Leaseholder – can you be both?

Rents still rising at below the rate of inflation

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Tenants in the UK have seen their private rents rise by 4.7% in the year to February – which is still below the annual rate of inflation.

The figures from the Office for National Statistics (ONS) show that rents rose by 0.3% from January and the annual percentage change is the largest recorded by the organisation since it began keeping records in January 2016.

View Full Article: Rents still rising at below the rate of inflation

OPINION: Are landlords really leaving the private rented sector?

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It has been reported this week that housing minister Rachel Maclean (main picture) told a meeting in Westminster that fellow Conservative MPs and the ‘property sector’ (i.e. the NRLA and other trade associations) are wrong to claim that landlords are leaving the sector.

This followed a Guardian article two weeks before that accused NRLA chief executive Ben Beadle of ‘peddling’ the line that the current Government squeeze on private landlords had led to more leaving the sector than usual.

The reason this debate has hotted up is that the NRLA and others are fighting a rear-guard action to persuade Ministers to go easier on private landlords, while campaign groups like Shelter, Generation Rent and the London Renters Union are seeking to help tenants mitigate the higher cost of living by limiting rent rises.

So where do we go from here? At a recent property industry event former Chancellor George Osborne made the point that governing a country is about managing competing interests in a balanced way.

What makes this difficult in the private rented sector is that the narrative adopted by the ‘tenants’ champions’ is extreme.

Profiteering

In a piece within the Open Democracy website, a London Renters Union spokesperson used language like “landlords tightening their grip on our housing system”, “profiteering” and “millions of renters are trapped in a poor-quality, insecure and extortionate private renting sector”.

Such points of view do not push the debate forward, but rather keep everyone behind their barricades living within their own echo chambers, rather than getting together to have a more grown-up debate about housing supply and funding in the UK.

Explosive

But the other accelerator in this sometimes explosive debate is a lack of hard facts, something everyone exploits.

There are said to be some 2.3 million landlords in the UK but no one is 100% sure how many are leaving the sector because there is no solid official record. The NRLA and others must rely on anecdotal reports from their members and internet polls, both of which are indicative, not fact.

By the way one thing is for sure though – rental supply is tightening, data from the main property portals shows, and a recent ITV investigation uncovered.

But similarly organisations like Shelter do not know exactly how many properties are sub-standard or poorly managed, or how many rogue landlords really exist.

Again, they can use anecdotal stories from their phone helplines and conduct polls to have stab but they are not the whole picture.

All this will soon all change. If the looming Renters Reform Bill includes the promised national register of PRS properties and their landlords, including details of their landlord or agent’s property and tenancy management track record, we’ll have a much clearer picture.

Once and for all we’ll all be able to see the real fluctuations in PRS supply, the number of landlords and how many properties are badly run.

Nigel Lewis is Editor of LandlordZONE.

View Full Article: OPINION: Are landlords really leaving the private rented sector?

BREAKING: Government squeeze on landlords has cost Treasury £1.5 billion

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Tax changes in the private rented sector have lost the Treasury £1.5 billion in revenue, according to new research commissioned by the NRLA.

Capital Economics found that restrictions in mortgage interest relief had contributed to 1.2 million fewer properties being available in the sector, just when renters across the country faced a shortage of homes.

According to Zoopla, compared to the five-year average, demand for rented housing is up 46% but supply is down 38%.

Capital Economics found that between 2010 and 2016, PRS stock increased by 3.7% a year, while between 2017 and 2021 – when the mortgage interest changes came in – it grew by just 0.4% a year.

The analysis reveals how, if private rented housing stock had continued to grow at a rate of 3.7%, there would have been 6.8 million properties in 2021 – about 1.2 million more than were actually available to rent.

The annual income and corporation tax revenue from these extra rented properties would have boosted Treasury revenue by £1.5 billion, it says.

Full review

The NRLA is calling on the government to conduct a full review of the impact of recent tax rises on the sector, including the impact of Mortgage Interest Relief changes.

It believes ministers must also consider the rationale for the change, given that the Institute for Fiscal Studies has previously argued it was wrong to suggest landlords have been taxed more favourably than homeowners.

Chief executive Ben Beadle (pictured) says its research shows that the government has shot itself in the foot.

“When you consider that the government’s rationale for the changes has been refuted by the Institute for Fiscal Studies, it is clear that the Chancellor needs to review this misguided tax hike,” he adds.

View Full Article: BREAKING: Government squeeze on landlords has cost Treasury £1.5 billion

FACT: Government squeeze on landlords has cost Treasury £1.5 billion

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Tax changes in the private rented sector have lost the Treasury £1.5 billion in revenue, according to new research commissioned by the NRLA.

Capital Economics found that restrictions in mortgage interest relief had contributed to 1.2 million fewer properties being available in the sector, just when renters across the country faced a shortage of homes.

According to Zoopla, compared to the five-year average, demand for rented housing is up 46% but supply is down 38%.

Capital Economics found that between 2010 and 2016, PRS stock increased by 3.7% a year, while between 2017 and 2021 – when the mortgage interest changes came in – it grew by just 0.4% a year.

The analysis reveals how, if private rented housing stock had continued to grow at a rate of 3.7%, there would have been 6.8 million properties in 2021 – about 1.2 million more than were actually available to rent.

The annual income and corporation tax revenue from these extra rented properties would have boosted Treasury revenue by £1.5 billion, it says.

Full review

The NRLA is calling on the government to conduct a full review of the impact of recent tax rises on the sector, including the impact of Mortgage Interest Relief changes.

It believes ministers must also consider the rationale for the change, given that the Institute for Fiscal Studies has previously argued it was wrong to suggest landlords have been taxed more favourably than homeowners.

Chief executive Ben Beadle (pictured) says its research shows that the government has shot itself in the foot.

“When you consider that the government’s rationale for the changes has been refuted by the Institute for Fiscal Studies, it is clear that the Chancellor needs to review this misguided tax hike,” he adds.

View Full Article: FACT: Government squeeze on landlords has cost Treasury £1.5 billion