13 Jul

David Cox, managing director, Association of Residential Letting Agents, comments on the housing measures announced in the Chancellor’s Emergency Budget:

David Cox, managing director, Association of Residential Letting Agents, comments on the housing measures announced in the Chancellor’s Emergency Budget:

 “In a bid to limit the growth in buy-tolet
properties, the Chancellor has announced plans to reduce the amount of tax relief investors can
claim on mortgage interest payments. At a time when the supply of rental property is already
struggling to meet demand, it is dangerous to try and reduce growth in the rental market.
“The Chancellor has also replaced the wear and tear costs to a new system that means landlords can
only deduct the exact amount that they will incur. However, the unintended consequence of this, and
the reduction in income tax is that landlords will seek to recoup their costs by hiking up rents. As a
result, tenants will have to save for longer to be able to afford a deposit for a house, as more of their
income will be eaten up by rent. This creates a vicious circle where tenants are renting for longer
because the hope of owning a home becomes less achievable. The Government needs to think about
the market more holistically and while the rental market remains such an important tenure, we need
to find the right balance between landlord taxation and tenant aspiration.” 

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