Higher taxes won't help renters buy homes

The National Residential Landlords Association (NRLA) has strongly rejected claims by the Joseph Rowntree Foundation that tax hikes on landlords will help tenants to buy homes.

In our response we also argue that the available statistical evidence (from Rightmove and many other organisations) shows how the private rented sector still suffers from a chronic supply and demand crisis.

Responding to analysis by the Joseph Rowntree Foundation that suggests tax hikes on the private rented sector have benefited first time-buyers, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“The idea that higher taxes are good for renters is simply not correct. 

“Both the former head of the Institute for Fiscal Studies and the current Housing Minister agree that tax policy affects rent levels. It is not clear how higher taxes, leading to higher rents, makes it easier for tenants to save for a home of their own. 

“Despite some modest improvements in supply, there are still an average of 11 renters chasing every home to rent according to Rightmove. Further tax hikes will serve only to dampen investment in the sector, undermine tenant choice and push rents even higher.

“For millions of people, the private rented sector is vital for ensuring they have a place to call home. Rather than more piecemeal tax grabs, the Government should use the tax system more strategically. 

“We need tax policies that encourage long-term investment in new decent quality rental housing, supports investment in energy efficiency improvements, and incentivises responsible private landlords to bring long-term empty homes back into use.

“That’s how we expand supply, drive up standards, and ease pressure on renters.” 

-ENDS-

Notes:

•    Last year the then head of the Institute for Fiscal Studies, Paul Johnson, noted that: “The more harshly that landlords are taxed, the higher rents will be. One of the reasons that private rents have risen so much is that government policy has substantially increased tax payable by private landlords.”

•    Responding to a parliamentary question earlier this month, the Housing Minister, Matthew Pennycook MP, said: “The factors affecting changes in rents are complex and difficult to disentangle. They include house prices, supply and demand, taxation policy, interest rates and the movement of tenants into homeownership or social rented housing. It is not possible to assess the specific impact of each of these factors.”

•    According to Rightmove there are now an average of 11 enquiries per typical rental property. See details here.

•    Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.

•    The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.