RLA calls on new chancellor to change regulations

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The Residential Landlords Association (RLA) wants the new chancellor, Phillip Hammond to change the tax rules for buy-to-let landlords.

Previous chancellor George Osborne made changes that affected the buy to let housing sector. On top of a 3% stamp duty surcharge, he reduced commercial mortgage interest tax relief and reduced the wear and tear allowance scheme.

To lessen the tax burden, many landlords have set up limited companies to buy property. They have also been investing in semi commercial properties, as purchases of mixed commercial and residential properties do not qualify for the increased stamp duty.

The RLA believes that the changes have reduced investment by landlords and have also driven up rents. Its chairman, Alan Ward said in a July 2016 article on the RLA’s own website:

“Access to decent, affordable homes to rent is vital to supporting a flexible labour market and ensuring that young people and families have a place to live.”

The government has several initiatives to help first-time homebuyers, but Ward feels that there will still be a high demand for rented homes. Rather than penalise landlords, he believes that reducing the tax rules will encourage landlords to provide good quality housing in greater quantities.

The RLA said that Osborne introduced the new financial rules because he was concerned that private landlords purchasing homes were hindering first-time buyers. However, research by the RLA and the London School of Economics indicated that this is not a major issue, according to the aforementioned RLA article.

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