Housing minister Gavin Barwell says recent changes to buy to let mortgage interest relief and stamp duty will only affect a small proportion of landlords.
According to an ARLA report from a meeting of the All Party Parliamentary Group for the Private Rented Sector earlier this month - attended by Barwell - the minister quoted HMRC figures, claiming just one in five landlords would be affected by the mortgage interest changes coming into effect from April.
After his opening remarks the Minister then took questions from MPs.
James Gray, MP for North Wiltshire, raised concerns on behalf of his consituents regarding the tax changes. He said the new system - which will see mortgage interest tax relief restricted to the basic rate of income tax - could mean many landlords will no longer make any money at all from their property and may be forced to leave the rental sector.
Barwell agreed that the implications of the new system need to be considered, before quoting the HMRC figures.
The session also touched on the proposed ban on letting agent fees charged to tenants.
Helen Hayes, MP for Dulwich and West Norwood, welcomed the prospect of a ban, saying that the cost of fees was one of three key issues facing the private rented sector in her constituency.
The Housing Minister agreed with the issue about cost and noted the main reason for costs going up was a lack of supply of home to rent and rents going up by more than wages.
Barwell also said that the consultation into the fee ban - which will begin in the spring, it was announced last week - is to 'inform the detail of the policy and how it would work'.
In the session, Barwell is also reported to have made clear that Build To Rent - where institutional investment funds the construction and then management of purpose-built private rental apartments - would feature heavily in the government’s long-awaited White Paper on Housing, expected by the end of January.
Barwell told MPs at the committee that BTR is seen as good value for money and provides longer tenancies - a key objective of the current government.
Commenting after the APPG meeting, ARLA managing director David Cox said it was clear that the government was intent on implementing large scale changes to private renting in England.
“Since [the] 1980s, England has been building up to 40 per cent fewer homes than the 240,000 needed annually. The resulting shortage of about two million homes has left the country with soaring prices and a growing gulf between the property haves and have-nots” says Cox.
“Unfortunately, the government doesn’t seem to realise that punishing hard-working letting agents who deliver a hugely valuable service will not in the long run improve the affordability of the sector and the service that tenants receive.”
*The original version of this story was taken from a draft statement issued by ARLA. ARLA has since published an updated statement and this story has been amended to reflect the corrected version.
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I read an interesting point of view which suggested making it cheaper for tenants to move will limit rent rises and increase turnover which would actually benefit agents. I guess government sees the agent as adding unnecessary costs to the process and insufficient benefits. Certainly favouring institutional landlords will make achieving housing targets more plausible. It will also make the sector easier to regulate with less small landlords and more bigger ones. However the overall changes to the sector are certainly not fair, they penalise individuals and agents and they favour big landlords and institutions. I would find all this easier to accept if we were just told it like it is rather than pretending this is about fairness rather than amoral social engineering. It may well be that this strategy will result in more homes being built but the price will be a mortal wound to those who aspire to financial freedom and although the figures may look better, it's another step towards the characterless cloned society. The pity is there are better ways to solve the housing shortage but the powers that be just aren't open to them
It sounds like Mr Barwell has got the ban on letting agent fees and the upcoming tax changes mixed up.......!!
Turns out it's ARLA that got mixed up.....Why am I not surprised!
Keen to see how BTR is going to be positioned in the White Paper. Whether built to rent or purchased to rent these PRS schemes are being marketed at a 10-40% premium over comparable units in the same area. It's hard to see how these are going to provide better value for tenants versus the status quo...
Barwell said that "it is of course up to the discretion of the landlord to decide their fees".
So why in a democratic society am I being told what fees I can charge for providing my services as a letting agent?
So what qualifications doe this plonker have to make such a stupid statement? Probably the same as the other twit who told everyone that everyone in the purchase or rental market absolutely wanted an EPC.
............a degree in History and "O" level maths.
More mindless regurgitation of George Osborne's sophistry.
Even HMRC have admitted they've underestimated the number of Landlords that will be affected, and that they have no idea how many Tenants will be affected. Separate estimations say that 4.6m Tenants will be affected by the changes.
It looks like this Government have chosen to learn the hard way, and cause untold misery to millions along the way.
The government are defending their incompetence with more lies as most politicians do. It is certain that many more than 1 in 5 landlords will be effected detrimentally. Unquestionably the figures are wrong and baring in mind that the PRS houses more tenants than social housing now, hundreds of thousands of tenants will be paying more rent or be made homeless over the next 4 years. Furthermore many decent hardworking landlords will be forced to sell their properties or be made bankrupt, all to allow the large build to let and corperate backers of the Tory government to take over gradually and make large profits to the detriment of good landlords and tenants alike. Clause 24 tenant tax is a completely descriminatery, corrupt and vindictive attack on tenants and landlords by an incompetent, negligent right wing Tory shambles of a government
The only Landlord that will not be affected are the landlords with no mortgages that are already making the most profit! That's a fair tax policy NOT!
Do not make the mistake that these politicians are stupid they have their own agenda and Landlords are an easy target with the added bonus that the middle classed Landlords being attacked will never vote labour so it is a win - win for the Tories.
The power house to this country, the middle classes currently have no political party that represents them! Oh well we will just have to make the best of it!
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