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The National Residential Landlords Association says controversial Chancellor Kwasi Kwarteng should use a £1.5 billion underspend to help buy to let investors and their tenants.
In a letter to Kwarteng the NRLA warns that whilst private rents are increasing by less than inflation, rising energy, food and other bills will make it more difficult for many tenants to meet their rent payments.
The NRLA also warns that landlords are struggling. The claim comes as the estate agency Hamptons has concluded that the impact of rising interest rates on mortgages raises the prospect of landlords making a loss on their properties.
Although government data confirms that landlords mostly prefer to keep rents the same to retain good tenants, the NRLA’s letter to Kwarteng notes that contrary to popular belief most landlords cannot shoulder the cost of rising prices indefinitely. It points to official data showing that 69 per cent of private landlords are basic rate income taxpayers.
The NRLA is calling on the Chancellor to adopt its plan for the sector, to be financed by a reported £1.5 billion underspend in budgets at the Department for Levelling Up, Housing and Communities.
The plan includes:
1. Reforming the benefits system to prevent rent arrears in the first place. This should include unfreezing housing benefit rates. It makes no sense to have support for housing linked to rent levels as they were three years ago; ending the five weeks wait for the first payment of Universal Credit; giving Universal Credit claimants the ability to choose, at the start of a claim, to have the housing element paid direct to their landlord if they so wish.
2. Extending access to emergency housing support (Discretionary Housing Payments) to those not in receipt of benefits.
3. Scrapping the £400 Energy Bills Support Scheme payment, and instead repurposing the money, paying it direct to every household in one go, for them to use towards the increased cost of living.
4. Addressing the supply crisis in the private rented sector – the biggest driver of rents. According to Rightmove, in the second quarter of the year, demand for private rented housing increased by six per cent compared with the year before. Over the same period, the number of available properties was down 26 per cent. The NRLA says the Chancellor should therefore reverse the decision to restrict mortgage interest relief in the private rented sector; end the stamp duty levy on homes to rent out.
The association cites research by Capital Economics suggesting that ending the stamp duty surcharge would see almost 900,000 new private rented homes made available across the UK over the next decade. This would lead to a £10 billion boost to government revenue through increased tax receipts.
NRLA chief executive Ben Beadle says: “Both landlords and tenants are struggling with the cost-of-living crisis. We need a package that supports both to prevent rent arrears and sustain tenancies.
“Our proposals provide a pragmatic way forward that would have an immediate and positive impact on the private rented sector. We call on the Chancellor to act as a matter of urgency.”
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