Landlords seem to be under attack from both right and left, it seems, according to complaints by the national organisations responsible for championing landlords’ cause.
In a story published by LandlordZone on the 22nd of September 2016, it was claimed that landlords have become no more than a political football used to disguise the absence of any coherent housing policy on the part of the government.
Mortgage interest tax relief
The unfair treatment of landlords, in the opinion of LandlordZone, began in the former government’s spring budget of 2015, when changes were announced to the tax regime affecting landlords. This introduced the steady removal of tax relief on mortgage interest paid by landlords – a process coming into effect from 2017 and reaching its conclusion in 2020.
Income tax, property maintenance, letting agency fees and landlord insurance are all important elements affecting the profitability of a buy to let business. There is concern that the pressures which many landlords believe they are under from government may force many of them simply to sell up, leave the rental sector market and so worsen an already serious housing shortage.
Some landlords may be turning a blind eye to the affect changes in income tax relief may have upon their businesses, but these will start to take effect from next year, when many landlords may be tipped over the brink and decide to sell.
Now, the Labour party has also weighed in with its own attack on landlords, said the Residential Landlord’s Association (RLA), in response to party leader Jeremy Corbyn’s remarks at the annual conference at the end of September.
Corbyn criticised the current arrangements under which he alleged that private sector landlords are profiting from £15.2 billion in tax-payer subsidies through the payment of housing benefit to their tenants, whilst tenants in the social housing sector received only £9.1 billion of housing benefits.
Defending such payments and the disparity between the private rented sector and social housing, the RLA’s policy director has pointed out that whilst 19% of British households are in the private rented sector, a smaller proportion of 17% living in social housing. Furthermore, the private rental sector has been growing more rapidly in size than the social sector, so it is hardly surprising that more of their tenants are in receipt of housing benefit.
Hiding the embarrassment
According to a poll conducted by the National Landlords’ Association (NLA), sniping from across the political spectrum has so worn down many landlords that they are too embarrassed to admit their role in the buy to let market.
The bad press has led more than 200,000 of the country’s 2 million or so private sector landlords to disguise the fact they are running buy to let businesses. Greatest embarrassment is felt in the East Midlands and the East of England, said the NLA in its report on the 9th of September 2016. Those polled in the southeast, the Humber and Yorkshire, on the other hand, seemed less worried about identifying themselves as landlords.
There is a stigma, it seems about being an investor in buy to let property. This is hardly helped by the pressure which politicians are heaping on the private rental sector.