There’s no doubt that landlords have been taking a bit of a beating recently from the government. Over the last 12 months’ landlords have seen:
The removal of the 10% wear and tear tax relief for furnished lettings
An extra 3% hike on stamp duty for purchasing second homes above £40K
Removal of higher rate tax relief on mortgage interest staged over 3 years from April 2017
Capital gains tax on an investment property to be paid in 30 days from April 2019
All these measures have left landlords reeling, unable to expand their portfolio and some have even cashed in their chips on the industry and walked away from property investment completely.
Throw into the mix the fact that banks are also tightening the mortgage criteria for buy-to-let borrowers, this has not been a great time to be a landlord.
So, what has this done to the housing crisis?
Well, effectively it’s made it worse. The government’s vision of stopping landlords from buying property so that first-time buyers can get a look-in hasn’t happened. Instead, the Royal Institution of Chartered Surveyors (RICS) has now reported that the UK is facing a critical rental shortage and an extensive build-to-rent programme is required to provide new accommodation for tenants.
RICS have forecasted that around 1.8 million more households will be looking to rent by 2025 and the measures that the government have imposed on landlords is doing nothing to solve this. Analysts are now urging the government to re-think its strategy for new housing and recognize the fact that buy-to-let property needs to play a significant part. There are calls to reverse the stamp duty rise, encourage build-to-rent programmes and release brownfield sites for more building.
It will be interesting to see if the government sits up and takes notice.