A Conservative peer has criticised the government's ongoing attacks on the private lettings industry saying that the Cameron administration should be nurturing landlords and not deterring them.
Lord Howard Flight says that between 1996 and 2013, some 83 per cent of all new dwellings created in England were in the private rented sector, the majority of which were created by investment from individual landlords.
"Yet over the last year the Treasury has embarked on a fiscal attack on those small companies and individual landlords, in the name of levelling the playing field with home owners. The reasoning is that landlords are occupying or buying up too many homes and so restricting access to affordable stock for would-be home owners and that buy-to-let investors, unlike owner-occupiers, enjoy the full tax-deductibility of interest on mortgage finance costs" Flight says in an article in the Daily Telegraph.
The article - written before the Budget in which residential landlords were singled out as not receiving the discounted Capital Gains Tax applying to other investments - goes on to suggest that the government is creating a false choice between helping prospective owner occupiers and tenants.
"There is little, if any, evidence to demonstrate that home owners and buy to let investors are chasing after the same properties" insists Flight.
"Owner occupiers have the tax benefit of capital gains free of Capital Gains Tax and no tax liability on the rental value of their occupation. Smaller landlords are good at buying up and refurbishing older properties which are less sought after by owner-occupiers. The danger is that the increase in taxes recently imposed will dissuade smaller landlords from investing in such properties, leaving them to stand empty, and bringing back housing blight to some areas" Flight writes.
He concludes by saying that at a time when the cost of a deposit is also increasing – with the average required for a first-time buyer being just under £33,000, according to the Halifax – the Chancellor’s tax moves "are counter-productive."
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