The tax and regulatory changes introduced in recent years have led to an increase in the number of landlords exiting the buy-to-let market, while others have focussed on switching to short-term lets, as a consequence of skewed policy that favours holiday homes over long-term properties to rent.
A fresh report published today by ARLA Propertymark suggests that almost 500,000 properties could be left unavailable for longer-term rent as more landlords exit the market in favour of short-term lettings.
The Residential Landlords Association (RLA) argues that this is primarily because the tax system favours holiday homes over the provision of long-term homes for private rent, illustrated by the fact that the government is phasing out mortgage interest relief for landlords to the basic rate of income tax, although this measure does not apply to furnished holiday lets.
David Smith, policy director for the RLA, said: “Today’s report highlights how inconsistent the government’s approach to the rental market now is.
“On the one hand the Ministry of Housing wants to encourage more landlords to offer properties to tenants on a long-term basis. On the other hand the Treasury has a tax system which makes renting out holiday homes more appealing at a time when demand for homes to rent is outstripping supply.
“What we need is a tax system that supports and encourages the majority of hard working landlords doing a good job to provide the long-term, quality rental accommodation tenants desperately need. We call on the Chancellor to do this in his forthcoming Budget.”