Calls for Support for Tenants and Landlords in Private Rented Sector

As Chancellor Jeremy Hunt gears up for the Autumn Statement, clamours for targeted aid in the Private Rented Sector (PRS) have reached a crescendo from industry voices.

Neil Cobbold, managing director of PayProp UK, has raised the alarm on the pressing need for urgent measures as tenants grapple with surging rents and landlords face escalating buy-to-let mortgage expenses.

Highlighting the challenges stemming from the freeze on the Local Housing Allowance (LHA) since April 2020, Cobbold emphasized the disproportionate coverage provided by the LHA against the backdrop of significant rent hikes within the PRS. “This leaves low-income families, the most vulnerable, with few affordable housing options,” Cobbold stated.

Expressing concerns about the potential fallout from abolishing Section 21, Cobbold articulated the risk of tenants evicted under Section 8 for rent arrears struggling to secure new housing. This could potentially lead to a surge in costly temporary accommodation for local authorities.

Proposing immediate actions, Cobbold emphasized the urgency of raising the LHA to alleviate immediate pressures, dubbing it a “long overdue” step. Additionally, he underscored the importance of addressing supply issues in the sector, cautioning against overlooking existing shortages while focusing solely on long-term housing solutions.

Turning attention to landlords, Cobbold shed light on the strain inflicted by Section 24, limiting their ability to deduct mortgage interest costs from taxable rental income. He argued that this policy drives higher-rate taxpayer landlords towards incorporating their properties, potentially reducing the rental stock as some opt to sell their properties.

As a viable solution, Cobbold proposed extending first-time buyer’s Stamp Duty Land Tax relief to certain tenants and incentivizing landlords to sell properties to other PRS-inclined landlords. These measures, Cobbold believes, would invigorate the sales market and deter a shift towards holiday lets or second homes.

In conclusion, Cobbold emphasized the government’s pivotal role in reshaping the scenario. “It’s a question of where the Government wants to spend the money. Do they want to raise the LHA rate to a realistic level? It would make a significant difference and it is long overdue,” he remarked.

The eagerly awaited Autumn Statement is slated for November 22nd, with stakeholders eagerly anticipating governmental responses to the sector’s pressing concerns.

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