This story was taken from the recent publication by Property 118 titled: “SECTION 24 of the Finance (no.2) Act 2015: “The unjust legislation that will make the UK housing crisis much worse””
One of the most regrettable aspects of the Government’s refusal to reverse s24 in the context of growing awareness of how wrong it is, is that tenants, despite being a key affected group, have been rendered invisible in all Government utterances on the subject.
The word ‘tenant’ was not even mentioned in the impact statement accompanying the Bill.
Fact: The PRS has played an essential role in this area of the housing market, especially since council and Housing Association accommodation has been sold off.
Fact: There is growing demand for the PRS to house the ‘lower’ end of the market. However, s24 will send landlords running in the other direction.
Four surveys of landlord intentions following the Budget decision showed that a majority of landlords will increase rents to combat the new massive tax bills that will become payable (the Residential Landlords Association found 65% of landlords would increase rents; for Rentify the figure was 56%; and the National Landlord Association estimated £118 per month would be added to rents; a Scottish Association of Landlords survey estimated the average rent rise expected as a direct result of the measure to be 12%).
The massive new tax burden placed on landlords is also likely to lead to a decline in maintenance standards. This move is thus detrimental to the interests of a large number of tenants in the private sector.
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