Housing crisis in England – call on Osborne to reverse tax changes
A BBC Inside Out investigation has shown the stark reality of the housing crisis in England. Between 2011 -2014 a total of 974,000 new homes were needed but only 457,490 were built.
That abject failure to meet demand poured on top of new tax laws proposed by George Osborne on the private rented sector are a perfect storm brewing together. It’s the right time for the Conservatives and Osborne to reverse the tax changes that penalise entrepreneurial landlords before they exit the market and cause an even bigger crisis.
Housing Minister Brandon Lewis is calling for 1-million more homes to be built during the next Parliament to combat the shortage but with prospective landlords exiting from buying new builds (where they accounted for around 10% of all purchases) because of the new tax laws, who’s going to buy them all? High and growing house prices certainly mean the underpaid, unemployed and migrant population will not be purchasing, so the next natural step is builders and construction industry to face a downturn as demand fails.
So landlords pull out of purchasing, the construction industry faces low demand and a slow down and largely because of an unbelievable, anti-business tax grab by the Conservatives on Landlords.
There may be a call to build 245,000 new homes a year, but who’s going to do that when no-one is there to buy them Mr Osborne? The fact is the UK depends on a buoyant private rented sector, especially as housing associations have little money to buy new stock – they are being hit by austerity cuts. And housing associations are not the answer – that’s effectively the Government buying housing itself through taxation raised by local Councils. And local Councils are not able to cope.
Now is the time for Osborne to reverse this ludicrous tax that demands landlords pay tax – 40% in most cases – on the interest that they already pay on mortgage borrowings. Right now there is huge ignorance in the landlord community to what this means. I hear of new landlords beaming with delight at buying new properties and then falling into the depths of despair when they realise that the new tax laws mean they may not make a profit at all.
The Government’s advice on what this tax means is I think deliberately vague because the Government knows how unfair it all sounds: ‘You borrow money to invest and we’ll tax you on the interest to pay.’ If they brought that rule into corporations, they would level the UK overnight as investment left the country. It’s completely against business and landlords.
Now is the time to join up housing policy for the sake of business, landlords, construction industry, owners, landlords and tenants. It’s time for common sense rules because with the best will in the world, I can guarantee in five years time nothing like 1-million homes will have been built and as the tax laws come into full force, landlords will be leaving the industry in their thousands and the housing crisis will only get worse. Sleeping on the street Britain is a reality under Osborne.