Buy-to-let residential landlords have been hit hard by changes introduced by the current government – for example, not many businesses have to pay tax on interest on loans they have taken out for business purposes.
However, in what looks increasingly like a race between the two main political parties to hammer landlords most, Labour has postulated significant changes, described by the National Landlords’ Association (NLA) as “ludicrous”.
Labour’s policy report, “Land for the Many”, demands and end to what it calls the “buy to let frenzy”, and proposes capping rent rises in line with inflation, the abolition of loan-interest tax relief and ending evicting tenants on a no-fault basis. Labour also plans to investigate abolishing inheritance tax and introducing a lifetime gifts levy in its place, thought to be much less generous than the current position.
The justification, as outlined in the report, is that Labour wishes to stabilise house prices to enable wages to catch-up, meaning more people can more comfortably afford to rent or buy properties. However, this would appear on the face of it to be at the expense of landlords.
As a further blow, Labour has also suggested that it might look to introduce a version of the right to buy in respect of privately rented properties, under which tenants could force landlords to sell their properties at a discounted price, to be determined by the government. The proposal has been met with fierce criticism, including from the NLA which has said that “to suggest that private landlords should be selling their properties to their tenants at a below market rate arbitrarily set by politicians is ludicrous”.
Many landed estates include portfolios of residential properties (often helping subsidise other traditional elements of the Estate) and there will therefore be serious concerns about the possibility of these measures being introduced. By careful planning, some of these changes can be mitigated against and we’d be happy to assist any clients or agents with such concerns.