A trade association has written to the Chancellor Kwasi Kwarteng asking him to use the government’s £1.5 billion underspend to help PRS landlords and their tenants.

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The association’s letter to Kwarteng has warned him that although rents are increasing they do not reflect the crisis of inflation, food, energy and other bills continual rises causing many tenants falling behind with their rent payments.

The association also told the Chancellor that landlords are finding the whole situation increasingly difficult to contend and is backed up by an estate agent chain’s claim that because of rising interest rates on mortgages, many landlords will end up making losses on their properties.

Even government figures confirms that the majority of landlords preferred to keep rents stable for good tenants, the letter tells the Chancellor that in spite of the popular media and activists spurious claims , many landlords will not be able to fund the cost of rising prices indefinitely; the association even cites official data confirming that 69 per cent of PRS landlords are in fact basic rate income taxpayers.

The association has provided its private rented sector plan for Kwarteng to consider and adopt and should be paid for by the reported £1.5 billion budgets’ underspend at the Department for Levelling Up, Housing and Communities.

The association’s plan includes:  

·      Reforming the benefits system to prevent rent arrears in the first place,  which should include unfreezing housing benefit rates as It makes little sense to have support for housing linked to rent levels as they were three years ago;

Ending the five weeks wait for the first payment of Universal Credit; giving Universal Credit claimants the ability to choose, at the start of a claim, to have the housing element paid direct to their landlord if they so wish. 

·      Extending access to emergency housing support (Discretionary Housing Payments) to those not in receipt of benefits.

·      Scrapping the £400 Energy Bills Support Scheme payment, replacing it with ‘repurposing’ , paying it direct to every household in one go, for them to use towards the increased cost of living.

·      Addressing the supply crisis in the private rented sector – the biggest driver of rents.

According to Rightmove, in the second quarter of the year, demand for private rented housing increased by six per cent compared with the year before. Over the same period, the number of available properties was down 26 per cent.

The association says the Chancellor should therefore reverse the decision to restrict mortgage interest relief in the private rented sector; end the stamp duty levy on homes to rent out.

The association refers to research carried out by Capital Economics which shows the need to scrap the stamp duty surcharge on second home and BTL purchases and by doing so could make available an additional 900,000 new private rented homes throughout the UK ‘ready to rent’ over the next ten years. This would also boost government coffers by an extra £10 billion with increased tax receipts.

A spokesperson for the association, says: “Both landlords and tenants are struggling with the cost-of-living crisis. We need a package that supports both to prevent rent arrears and sustain tenancies.