Personal Account

Landlords are a vital part of the housing market – so why won’t the Government treat them as such?

There is little that is more likely to provoke a sarcastic hand gesture of tiny violins playing – or something far ruder – than grumbling about being a landlord. Yet buy-to-let owners increasingly have the odds stacked against them and it shows no sign of abating.

For years, the landscape has been shifting against landlords, with tax changes eating into their profits. The introduction of a three-percentagepoint stamp duty surcharge made investing vastly more expensive. New capital gains tax rules introduced last year gave landlords just a month, instead of 22, to declare profits after a sale.

Since April, property investors have not been able to deduct mortgage interest payments from their tax bills, giving up what was an allowable expense four years ago for a 20pc tax credit. And there are rumours that the Chancellor will raise CGT rates in line with income tax.

On top of this, the pandemic has made things much harder for landlords. Rules brought in to protect tenants have come at the expense of the proprietors, leaving many owed months of arrears with no way to reclaim their property or money. The charity Citizens Advice calculated that a quarter of a million renters owed landlords £360m. A fifth of landlords have lost income because of the pandemic, YouGov found – and there is no furlough scheme, interest-free loan or cash handout to plug their earnings gap.

It is little wonder that landlords are fleeing the sector. Those who rejoice at this should realise that it ultimately backfires on tenants as it reduces competition and availability. But an increasing number are not able to quit, with more homeowners being turned into accidental and unwilling landlords. This will continue to grow as the scale of the cladding scandal leaves more people with homes they cannot sell and mortgage restrictions on first-time buyers reduce the pool of potential purchasers.

Meanwhile, average rents in London have been falling dramatically and house prices are expected to follow suit later this year.

I am an accidental landlord and my tenants moved out this week at the end of their contract, leaving me with a list of pricey repair and maintenance works. The new tenants are paying 8pc less in rent while the letting agent I use has raised its fees by 12.5pc.

The Government has protected the property market at all costs this past year, cutting stamp duty and keeping estate agents open, yet has neglected landlords. When will it recognise they are a crucial part of the system?

BYE BYE, BABY I am also landlord to another tenancy of sorts that is coming to an end this month – although on this occasion I will be glad for the vacancy. I am due to give birth to my first baby any day now and will be on maternity leave for the next few months.

I leave you in the capable hands of Sam Brodbeck, who will be running the Money team in my absence. I am hopeful that when we meet again, the world will look very different: Covid will be under control, lockdown will be a thing of the past and the sun will be shining over us all. Until then, I thank you for your correspondence and readership and wish you the best.

There is no furlough scheme, interest-free loan or cash handout to plug landlords’ losses