Calls are being made for politicians to make changes to support investment in private rental property and make sure funds are in place before the Homelessness Reduction Act can be properly implemented. The National Landlords’ Association has put forward several sensible proposals to HM Treasury ahead of the Autumn Budget Statement, which is due to be delivered on Wednesday November 22.
It has several recommends to help the private rental sector which, in turn, will help to ease the chronic housing shortage in many parts of the country. One recommendation is to review the removal of finance cost relief for private landlords. It also wants to see the introduction of Capital Gains Tax reduction measures to encourage sales of rental properties to existing tenants, or where the proceeds of a sale will be reinvested into the lettings business, or for poorly-performing investment properties and those invested in and used for more than 10 years.
There are also calls for the government to set up measures so that it is tax-efficient to move a letting portfolio into a corporate structure and to set up a government-backed investment vehicle allowing for the sale of properties into a managed fund.
The NLA also wants the government to bring back the Landlords’ Energy Saving Allowance. This would be particularly welcome as many properties – particularly older buildings – will not pass the new minimum energy efficiency standards required from April 2018. At present, this is another expense that landlords face as they will have to undertake the work needed to bring their properties up to standard if they wish to carry on renting them out. Other measures include removing the Capital Gains Tax surcharge and abolishing the Stamp Duty Land Tax levy on additional properties, which effectively penalise landlords.
Abolishing these additional financial burdens that landlords are facing would also help the government meet the requirements of the Homelessness Reduction Act which is set to be implemented next year. This new act will require local housing authorities to help all eligible applicants instead of those it considers to have a priority need. Councils will have to help people who are at risk of losing their homes as soon as they are threatened with being made homeless. They will also have to help homeless people find suitable accommodation, whether they are priority cases or ‘intentionally homeless’. But to do this, they need homes to put them in. That means there should be a national policy for councils to work together with private landlords to make sure there is sufficient housing stock.
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