There have been some interesting headlines this week relating to landlords and property investing.
Here is the news in brief:
- 1.8 million new rental homes needed by 2025 to keep up with current demand
- 58% of RICS Estate Agents have seen a drop in buy to let sales since April 2016
- 86% of landlords have no plans to increase their rental portolio
- UK households renting doubled from 2.3m in 2001 to 5.4m in 2014
- Landlords fight back with Cherie Blair
The Royal Institution of Chartered Surveyors (RICS) reported this week that the Government must urgently deliver 1.8 million new rental homes for UK families, as new figures show a sharp drop in the number of available properties. New figures show an ailing rental sector that cannot keep up with predicted demand.
RICS have reported that 86% of landlords have no plans to increase their rental portfolio this year, with this trend set to stay for 5 years.
Rental Supply Crisis
With rising house prices making home ownership increasingly unaffordable, it is predicted that by 2025, 1.8 million more households will be looking to rent, rather than buy. However, new RICS figures show that 86% of landlords have no plans to increase their rental portfolio this year – with that trend set to remain for the next five years. Additionally, a net balance of 58 per cent of RICS estate agents have reported a drop in buy-to-let sales since May.
The Government dampened the demand for buy-to-let investments by making changes to the Stamp Duty tax in April this year, therefore this has further reduced the supply. RICS forecast that within 10 years there will be a rental supply crisis. This problem will only get worse next year when the landlords’ right to deduct their mortgage interest from their income tax bill is removed.
Cherie Blair to represent the landlords!
However Cherie Blair QC is currently fighting this new proposed tax. She is to represent ‘Axe the Tenant Tax’ at the permission hearing for the judicial review of section 24 of the finance act 2015.
Axe the Tenant Tax is challenging the proposed tax changes on the basis that Section 24:
• Is a failed tax experiment from Ireland where rents increased 50% in three years and was scrapped by the Government as a result
• Is an unfair tax on tenants and non-corporate landlords and will distort market competition
• Will increase rents substantially
• Is a bad tax policy that breaks Generally Accepted Accounting Principles (GAAP)
• Will make the UK housing crisis worse
The result of the permission hearing will be issued on Thursday 6th October.
The former PM’s wife, who owns with her family 10 houses and 27 flats, will challenge attempt to stop buy-to-let costs being a claimable business expense.