Property tax will result in rise in homelessness

IT came as no surprise that Leicester city councillors voted in favour of a new property tax in the form of licensing of private landlords in specific areas of the city.

Whilst being sold as a means of targeting “rogue” landlords, the reality will be that such landlords will continue below the radar to exploit vunerable tenants, whilst the council rakes in large amounts of tax in the form of a licence fee costing over £1,000.

If the council were serious about controlling poor landlords then there are already ample pieces of legislation that can be used to help conformity with appropriate standards. Such things as annual gas safety certificates, electrical certificates.

Energy performance certificates and building regulations are already covered by legislation that does not require a mandatory licensing scheme and any sensible landlord as well as their agents already comply with these.

The net result of the council’s scheme will have at least three consequences.

Some landlords will see this tax as yet another expense and decide to remove their rental properties from the market, thus adding to an already shortage of supply.

This can only mean higher rents as more would-be tenants chase fewer homes. The licensing fee will be passed onto tenants so that rents will rise to cover these costs.

The tenants will be worse off as their cost of living rises thanks to the council’s action.

With fewer properties to rent and at higher costs, homelessness will increase. Ironically, Leicester City Council as the appropriate authority will have to make further arrangements to house those affected.

This is surely not what was intended by the tax raised under this scheme.

Whilst councillors may see this scheme as a huge source of additional income, it is not without its downsides which, I suspect, will not dawn upon them before the damage has been done to the rental market and those who want to rent a home.

There are better ways of ensuring legislation is complied with without inflicting further costs on those who wish to rent.

Bernard Lamb, Stoke Golding