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.”