Landlords reject idea higher taxes benefit first-time buyers
The National Residential Landlords Association (NRLA) has rejected analysis by the Joseph Rowntree Foundation (JRF) that suggests tax hikes on the private rented sector have benefited first time-buyers.
A report from the JRF has found that reforms introduced by governments from 2016 were “effective in addressing tax imbalances that benefitted landlords over and above ordinary homebuyers”.
According to the JRF, higher taxes stalled growth in the private rented sector, ultimately leading to 1.1m more households in the UK owning their own homes than there would have been if the private rented sector had increased at the same rate as prior to 2016.
But Ben Beadle, chief executive of the NRLA, said that “the idea that higher taxes are good for renters is simply not correct.”
“It is not clear how higher taxes, leading to higher rents, makes it easier for tenants to save for a home of their own… Further tax hikes will serve only to dampen investment in the sector, undermine tenant choice and push rents even higher,” he said.
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The JRF argued that a move to close loopholes that “allow landlords to avoid paying higher rates of tax” would be welcome, and would encourage more people into homeownership.
“The previous government rightly recognised that the tax system had swung too far in favour of landlords over and above people looking to buy their first home,” Darren Baxter, Principal Policy Adviser at JRF, said.
“This government can and should build on the success of these reforms to make homeownership a reality for more people,” he added.
Property experts largely came out against the possibility of higher taxes on landlords, arguing that another disincentive would reduce supply further and put upward pressure on rents.
“Those that stay may pass on the extra costs in other ways. Governments need to fully appreciate that when you tax an activity, you get less of it,” Tom Bill, head of UK residential research at Knight Frank, said.