High Profile Lettings Agency Backs Petition
A high profile lettings agency has backed a petition demanding the reinstatement of tax relief for landlords.
High profile lettings agency Benham and Reeves says it wants the full amount of mortgage interest to be set against rental income before tax is calculated.
Tax credits, which came into force as of April 2020, resulted in landlords no longer being able to deduct any of their mortgage interest from their rental income when calculating the taxable profits of their investment.
Instead, a 20 per cent tax relief on mortgage interest payments was implemented, a change that has severely reduced the profitability of buy to let investing. There’s also been a string of other legislative changes such as a stamp duty surcharge on additional homes and, more recently, changes to Capital Gains Tax allowances.
The petition is nearing 20,000 signatures and can be found at: https://petition.parliament.uk/petitions/627785
“Rather than commit to solving the housing crisis and build more homes, the government has looked to bring about a short term fix by forcing landlords to sell up and exit the buy to let sector. This has been orchestrated via a number of legislative changes designed to dampen the financial returns available to investors” explains the director of Benham and Reeves, Marc von Grundherr.
He says the consequence of this is a reduction in suitable rental properties – forcing up costs for tenants as the stock shortage worsens nationwide.
He continues: “While the Build to Rent sector certainly fills a need in the modern market, the government would be ill-advised to pin all of its hopes on this emerging market. Build to Rent rental values are considerably higher than those found within the wider private rental sector and so the average tenant simply can’t afford them.
“We’re urging the government to reconsider just one of their recent changes and allow landlords to once again deduct their mortgage interest from their rental income and we’re not alone. A survey of our landlord base found that 73 per cent of those who have plans to exit the sector would refrain from doing so if these changes were reversed.
“It’s time the government realises that the nation’s landlords are the backbone of the private rental sector, but it’s simply not realistic to expect them to play such a vital role if it’s not financially viable.”