8th
Jun 2016
At last a politician has supported private renting landlords instead of tarring them as rogues and just plain money grabbers.
Tory MP David Jones, former Welsh Secretary MP for Clwyd West, has written an article in favour of the sector and questions the government in the Conservative home magazine and asks: “Why are we clobbering people who provide homes to rent?”
In the piece he says that he understands the government desire to create higher home ownership; however he rightly states that the housing crisis is because there are not enough new house builds to keep up with demand. Private landlords are helping to house people who are unable to afford their own homes because of house prices rocketing due to supply and demand.
David Jones disagrees with the common perception that private landlords enjoy a lower rate of tax than home buyers and he quotes a piece from the Institute for Fiscal Studies who has said:”The tax system is not, and was not, even before the recent changes, more generous to people buying to let”. No wonder the sector is in such a furore over Osborne’s tax changes on the mortgage interest relief.
The punitive measures that have been introduced, means that eventually it will be the tenants who will have to pay for the government’s levies, as landlords will try to claw back some of the additional costs. Private landlords will be unlikely to invest into the market which will need 1 million rental homes by 2021.
In a recent survey an association polled landlords how they view the PRS in light of the tax and duty changes, and 78% stated that they are put off of investing further.
Jones feels that the treasury saying that potential home buyers are up against private landlords when attempting to get onto the property ladder is ridiculous as there is no evidence to back its claim.
MP Jones has also suggested some positive resolutions within his article that will benefit all.
If landlords decide to sell their properties to tenants then it will be fair and just if they should be just liable for 20% Capital Gains Tax. This could help to increase private sales and properties on the market.
Another quite revolutionary measure that Jones recommends, is that landlords should not have to incur the extra 3% stamp duty when their purchases help increase the number of housing properties. He also claims that 39% of landlord would be in favour of investing in new housing builds to rent, if this was introduced.
He urges the government to review the mortgage interest charges as it is outright unfair as 1,200 landlords that were polled stated that more than 60% who were paying basic rate of tax, would now be pushed into the higher tax bracket. This is because of the new rules making landlords pay tax on their turnover even when their actual revenues have not increased.
Jones concludes his article by writing : “As a party, we should ask ourselves why we are clobbering a group of people who, having been hit by Gordon Brown’s pension credit reforms, decided to invest in property as a way of providing financial security for themselves and their families”.
News Archive »