Tenants Need a Budget That Boosts Housing Choices
Ahead of this week’s budget, the National Residential Landlords Association (NRLA) is publishing the below press briefing outlining the key challenges the Chancellor needs to address in the rental market.
Boosting Tenant Choice
Private sector tenants across the country are struggling as a result of the demand for rented homes massively outstripping supply. It is limiting choice about where they live, driving up rents, and making it harder for them to hold rogue and criminal landlords to account given the lack of alternative housing to move into.
According to Zoopla there are now an average of 21 people competing for every rental property, more than double pre-pandemic levels. It notes that: “Increasing the supply of homes for rent is essential to help to alleviate the scale of rent rises in the face of sustained demand.”
Tina Paillet, President of the Royal Institution of Chartered Surveyors, has concluded: “RICS survey results continue to highlight the pressures on renters, with demand consistently outstripping supply.” She called for measures aimed at “increasing supply and making housing more affordable for tenants.”
Tenants need pro-growth tax measures to boost choice. This should include abolishing the three per cent stamp duty levy on homes purchased to rent where landlords refurbish, and bring back into use, any of the over 250,000 long term empty homes in England.
Avoiding Further Tax Hikes Which Increase Rents
Further tax hikes on the rental market would serve only to hurt tenants. Paul Johnson, Director of the Institute for Fiscal Studies, has concluded: “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.”
Supporting Investment in Energy Efficiency Improvements
The Chancellor needs to take steps to support investment in energy efficiency improvements in the private rented sector.
The Committee on Fuel Poverty has noted: “Landlords could be helped to meet these standards through tax offsets for improvements, loans or potentially grants for landlords with a low profit margin in areas of low rental value.”
Certainty on Housing Benefit Rates
Tenants and landlords need certainty that housing benefit rates (the Local Housing Allowance – LHA) will remain pegged to at least the lowest 30% of rents for the duration of this parliament.
The Joseph Rowntree Foundation has calculated that if LHA rates remain frozen over this parliament, on average, private tenants on housing benefits will be around £700 worse off per year.
Speaking ahead of the Budget, Meera Chindooroy, Deputy Director for Campaigns, Public Affairs and Policy at the National Residential Landlords Association, said:
“Tenants across the country are struggling as a result of a chronic shortage of homes to rent to meet ever growing demand. Planned reforms in the Renters’ Rights Bill will fail to achieve what the Government wants without greater choice for tenants about where to live.
“The Chancellor needs to announce pro-growth tax measures, along with plans to support investment in energy efficiency improvements.
“At a minimum, it is essential that the Government gives certainty to tenants and landlords by announcing that housing benefit rates will be pegged to market rents for the duration of this parliament.”
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