Kate Davies, executive director, Intermediary Mortgage Lenders Association (IMLA)
Landlords play a vital role in society, providing homes for almost 20% of the UK’s households – more than the social rented sector. And we all know that the heady combination of a punitive tax regime, tightening regulation and higher interest rates have made running a buy-to-let business more challenging than ever in recent years.
Buy-to-let landlords are now the only small businesses in the country taxed on their turnover rather than profit, and they are subject to the same 3% excess Stamp Duty as those buying a second homes for themselves.
Since the beginning of last year, landlords have faced the added burden of higher interest rates, leading the National Residential Landlords Association to warn in March that one in 10 landlords were likely to quit the sector. While a few may sell to other landlords, any loss of rental stock would worsen the supply/demand imbalance in the sector, which has driven average rents to record levels.
Labour has traditionally tended to be seen as the party of the tenant, rather than the landlord. But the new government needs to correct that impression, and quickly.
The IMLA Landlord Survey published last December shows a market predominantly supplied by small businesspeople who will struggle to break even in the next two years. The research also revealed that most buy-to-let landlords do not have substantial resources at their disposal outside their property business. On average, landlords’ non-rental income is roughly in line with tenant income, except in London where tenants earn substantially more.
The new government needs to understand the extent of the challenges landlords face, and put to rest their fears of more tax and regulation.
Labour has talked about growing the proportion of owner-occupiers and the social rented sector. Both would improve the quality of life for many people - indeed, we desperately need far more social rented housing. But this need not come at the expense of the Private Rented Sector, which can and should continue to play an important role in offering quality housing to a large slice of the population who can afford it, but either cannot or don’t want to buy their own home.
The new government has a great opportunity to address the UK’s shocking housing shortage, starting right now, but with a long-term vision for the future. A plan which ‘turbocharges housebuilding’ (as Keir Starmer and Rachel Reeves vowed on 1st July) for everyone – homeowners, private renters and social tenants. Buy-to-let landlords must form part of the plan, and the new administration should act swiftly to show support for these hardworking businesspeople who provide such a core part of our housing landscape.
By : 
Comments
Complete the form on this page to submit your comment, and register your interest in the Landlord Leaders Community.