Civitas: buy-to-let investors should face restrictions
01-05-2015
By Damian Fantato
Buy-to-let investors should face restrictions on how much they can charge their tenants, a report into the UK’s private rented sector claims.
The 58-page paper, written by Daniel Bentley of Civitas, claims the UK’s housing market is “a mess” because of a combination of a lack of houses being built and an economic environment which encourages investors to buy up existing housing stock without increasing supply.
To combat this Mr Bentley’s paper, called The Future of Private Renting, said indefinite leases should be introduced as the norm while in-tenancy rent increases should be restricted to an index-linked ceiling.
He also proposes giving investors greater incentives to invest in buy-to-let housing to balance out the restrictions.
These could include a combination of capital gains tax exemptions after a period of time, depreciation allowances and making potential rental losses tax deductible.
Mr Bentley said: “If the private rented sector is to meet a larger proportion of our housing needs, including for families and those who would traditionally have preferred to buy a home, then it must offer a better deal for tenants.
“This means longer security of tenure and more predictability and affordability in rents.
“As well as providing greater security to the large, and growing, numbers of people in the private rented sector, the proposal advanced here would also provide some respite to the general taxpayer by limiting the future growth of the housing benefit bill.”
Figures from the Department for Communities and Local Government show owner-occupation is in decline with 18 per cent of all households in England privately renting.
Meanwhile figures from the Conference of Mortgage Lenders have shown the number of buy-to-let loans for house purchase has been increasing, with 9,900 in October while in January 2013 this figure was around 6,000.