A leading agent is warning that any additional tax on landlords could lead to property sell-offs and a further supply shortage.
Dominic Agace, chief executive of Winkworth, says further tax penalties on landlords - as called for by Labour leader Sir Keir Starmer in a speech to the Local Government Association confererence - could lead to a reduced number of rental properties and higher rents.
Agace says: "This could push landlords to sell off more properties, reducing supply and leading to rent increases - which would be more costly to working people needing to rent than the 1.25 per cent rise in National Insurance.
"A healthy private rental sector is essential and landlords can't be pushed much further in areas such as London where yields are already very low and rents have declined significantly as a result of the pandemic."
Agace instead wants Chancellor Rishi Sunak to use next month’s Budget to make it more attractive for landlords to invest in the private rented sector in central London to ensure young people starting out on a career are able to find a home to rent.
In Winkworth’s latest episode of The Property Exchange podcast, Agace claims many landlords have sold off investment properties in central London.
This was following tax changes on mortgage relief available to landlords and the introduction of a three per cent surcharge on second property purchases - which has led to a reduction in available rental properties.
He comments: “30 per cent of homes in London are in the private rented sector. Young professionals coming to work in London to build a career need to be based in the capital and it is critical that housing stock is here and affordable. It is important that they are able to come to ensure our continuing status as a global centre. There has to be a balance of fairness between tenant and landlord.”
He adds: “Prices in central London have come down so it is a good time to invest and make the most of the capital growth and increasing rents as people return to the capital. However, landlords need some fresh encouragement from the Chancellor to invest in London.”
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