Landlords around the UK have warned the government of the potential rental market crash, caused by tax change plans announced by the government. These plans were described as “reckless” by the National Landlords Association (NLA).
The NLA said that these changes are going to be catastrophic, with landlords already leaving the market in panic, which will only worsen rent prices.
They initially called out some changes made 5 years ago regarding tax relief on mortgage interest changes. George Osborne, chancellor at the time, decided to begin phasing out tax relief to a tax credit of 20% by April of this year.
The NLA has used figures from Zoopla to show the impacts these are already having, with private rents rising by 2.6% in the last quarter of last year. Tenancy demand also rose to 8%, alongside a 4% drop in the number of properties available in the UK.
NLA CEO Richard Lambert said that landlords are leaving en masse due to an all time low in confidence in the sector.
He said: “Five years ago, we warned the Government that its reckless plan to scrap legitimate tax relief on landlords’ finance costs would backfire, disrupting the supply of private rented homes.
“Now, in 2020, households across the UK are reaping the whirlwind sown by David Cameron as investors turn their attention elsewhere.
“The new government has an opportunity to break with the past and work in concert with landlords to ensure housing demand is met with good quality rented accommodation.
“We urge Sajid Javid to use his first Budget to tackle the inequity of the way his predecessors have taxed landlords.
“By focusing on Capital Gains Tax, extending rollover relief and reintroducing taper relief, landlords could be encouraged to reinvest for the long term rather than exit the market, thereby helping to avert an impending crisis.”
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