Chancellor Philip Hammond’s autumn budget has failed to address the challenges faced by Britain’s ten million renters, says Belvoir CEO Dorian Gonsalves (pictured).
“We are disappointed that despite persuasive arguments from many key financial and industry experts, there has been no reversal of the punitive tax changes that were imposed on landlords by George Osborne in 2015,” says Dorian.
“We believe that reversing those tax changes would have been an important factor in helping to increase the supply of rental properties in this country and would alleviate some of the pressure on a Private Rental Sector (PRS) that is facing unprecedented stress as tenant demand continues to increase and less good quality housing is available to accommodate this.
Dorian says that it isn’t just a lack of a deposit and affordability issues in buying a home that aree driving tenant demand – “In many ways this budget seemed almost to put an unhealthy emphasis on home ownership and failed to recognise that many young people are actively choosing to rent rather than to become first time buyers.
“The reasons for renting are numerous, the English Housing Survey of 2015-16 showed that first time buyers are increasingly likely to live in privately rented accommodation before they buy their first home, with numbers increasing from 39% in 1995-96, to 49% in 2005-06, and to 66% in 2015-16.
“Research confirms that almost one in four households in Britain will be renting privately by the end of 2021 and last year the Royal Institution of Chartered Surveyors predicted that 1.8 million new rental homes will be needed by 2025. Unfortunately there seemed to be nothing in this budget that will help to drive up the supply of rental properties that are needed to provide accommodation for those who choose to rent.
“The Chancellor made a very brief reference within the budget to the launch of a consultation on longer tenancies in the PRS, and how landlords might be encouraged to offer these to tenants who wanted the extra security, but there was no time frame or further details and we wait with interest for further information regarding any incentives that may benefit the sector.”
Where’s the white paper?
“At the last Conservative Party Conference, Communities Secretary Sajid Javid suggested new measures that would make it mandatory for all DIY landlords to join an ombudsman redress scheme, and also talked about the ban on tenant fees, mandatory client money protection and licensing of agents. We presume a new white paper will be published in the new few months, which will address these measures and demystify the Chancellor’s comments about long-term tenancies.”
David Cox, Chief Executive, arla | propertymark is more supportive of the Chancellor’s Budget, “We are pleased that the government will consult on longer term and more secured tenancies, this feels to be in line with the holistic approach they are taking towards the rental market.
Have your say!
However, letting agents can still influence the final legislation. Before the Budget, David said, “The Communities and Local Government (CLG) Select Committee is to conduct pre-legislative scrutiny of the Government’s proposals to ban tenant fees imposed by landlords and letting agents on tenants in England. The Committee plans to hold a series of oral evidence sessions in the New Year with experts, tenant, letting agent and landlord associations, and trading standards authorities. These sessions will be held in tandem with the sessions for the Committee’s existing inquiry into the Private Rented Sector.
Prior to the publication of the draft Bill the Government held a public consultation on the proposals. The Committee will take into account the response to that consultation as part of its pre-legislative scrutiny. However, written evidence is invited specifically on aspects of the draft Bill as published which are considered to go beyond the scope of the Government’s consultation.
Submissions need to be received by 14 December and should address the bullet points identified above. ARLA Propertymark will be making a submission and will share this with members shortly. To make your views known to us please email: [email protected]