Monday, 21 December 2015
Treasury proposals risk reducing PRS supply, say landlords
Proposals by the Treasury to hand greater powers to the Bank of England to make access to buy-to let-lending harder risks choking off the supply of new housing, according to the Residential Landlords Association (RLA).
The RLA is arguing that the consultation (published 17 December), coming on top of extra tax payments by landlords and stamp duty increases on buy-to-let properties, has the potential to cut off investment in the private rented sector.
According to Government figures, 83% of all new dwellings created between 1996 and 2013 were private homes to rent. With PwC predicting that almost 60% of young people will be in rented housing by 2025, there is a need for the private rented sector to keep expanding.
The RLA says that all that the different measures by the Government will achieve is to create a greater shortage of housing, driving up rents for tenants.
The consultation comes as the Council of Mortgage Lenders concluded that buy-to-let mortgage lending is “still much lower than in the 2006-8 period.”
Commenting on the consultation, RLA Chairman Alan Ward said: “There is no clear evidence that the property boom is caused by buy-to-let investors, when rising prices are mainly concentrated in London and the South East. This is largely fuelled by foreign investors and speculators treating our property as a commodity.
“The Residential Landlords Association supports the principle of the Bank of England ensuring that lending does not pose a risk to the stability of the financial sector. It is important that lenders do not saddle landlords with debts which they cannot pay back. But landlord investment is essential to the supply of homes to rent.
“The overwhelming majority of landlords are responsible borrowers providing homes as a long-term business.”