The National Residential Landlords Association (NRLA) has hit back at 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 NRLA, said the idea that higher taxes are good for renters is simply not correct.
He said: “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.”
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, 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.”
This article is taken from Landlord Today