Home Property ‘Chancellor offered slim pickings for the PRS,’ says AIIC chief

‘Chancellor offered slim pickings for the PRS,’ says AIIC chief

by LLP Finance Reporter
23rd Nov 23 12:54 pm

Chancellor Jeremy Hunt missed ‘a golden opportunity’ to provide support for the hard-pressed Private Rented Sector, according to Daniel Evans, chair of the Association of Independent Inventory Clerks.

The Chancellor increased the National Living Wage from £10.42 to £11.44 per hour and raised the Local Housing Allowance to the 30th percentile of market rents from next year. He said this would help some 1.6m households currently renting in both the private and social housing sectors. It’s the equivalent of some £800 per year per household receiving LHA.

He also announced a 2% cut in the employee national insurance rate and the scrapping of Class 2 NI contributions for the self-employed – both measures designed to put more money in people’s pockets.

Evans welcomed the moves but he said they fell short of providing the support necessary to help a sector in crisis.

“Unincorporated landlords still cannot deduct their mortgage costs from rental income – which is patently unfair to them as business people,” he said.

Still rising

“This would have been the one tax measure that would stop landlords leaving the sector and creating the drastic shortages of supply that we are witnessing today. We were looking for a solution but what we received was slim pickings.

“Rents are still rising and are forecast to continue next year. While buy to let mortgage rates remain high, many landlords have no alternative but to increase rents accordingly and their tenants are feeling the squeeze.”

The chancellor also announced a consultation on a new permitted development right allowing property owners permission to convert houses into two flats.

“But how long is that going to take? It smacks of tinkering around the edges of the problem when there was a golden opportunity to introduce positive tax reform to get to grips with the issue now,” he said.

“There were some other measures including extra cash to make the planning process more efficient which might accelerate the delivery of new housing but it might take years before the PRS sees any substantial benefit.

“There were no changes to capital gains tax or inheritance tax – both of which had been widely rumoured. But what we got were crumbs of comfort”

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