Chancellor Philip Hammond been heavily criticised by one of the UK’s largest independent letting agencies for failing to reverse taxes on landlords imposed by his predecessor George Osborne. Dorian Gonsalves, chief executive of Belvoir Lettings PLC (LON:BLV), said he was disappointed there was no action on the ‘punitive tax changes’ introduced in the 2015 Budget.
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“Lack of a deposit and affordability are certainly not the only factors that are driving tenant demand and yet in many ways this budget seemed almost to put an unhealthy emphasis on home ownership.” “Many young people simply do not want the commitment of a 25-30 year loan. “Also many young tenants are students, or prefer the flexibility of renting to enable them to work in different locations.” George Osborne removed mortgage interest relief in 2015 and shifted the way tax is levied onto turnover rather than profit, but reversing this would increase the supply of rental properties and alleviate some of the pressure on the sector, Gonsalves believes.
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Almost one in four households in Britain will be renting privately by the end of 2021 and the 300,000 homes that Hammond has pledged to achieve by the mid 2020s will not come close to meeting this demand, he added. A consultation on how to encourage landlords into longer tenancies was suggested yesterday, but there was no timeframe or further details. “We presume a new White Paper will be published in the new few months, which will address these measures and demystify the Chancellor’s comments about long-term tenancies.”