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ARLA Propertymark contribute to PRS and poverty research project

Wednesday 16 August 2017

ARLA Propertymark has provided information to the Cambridge Centre for Housing & Planning Research (CCHPR) who have been commissioned by the Joseph Rowntree Foundation to investigate how to improve the English private rented sector as a source of accommodation for people in poverty.

The project, which ARLA Propertymark was invited to participate in, is exploring whether fiscal and non-fiscal measures could be used to incentivise private landlords to improve the affordability, conditions or security of rented housing. The project is also investigating the viability of applying incentives inspired by practices in other countries, and whether incentives for landlords or investors have the potential to improve the delivery of standards and tenancy conditions to private sector tenants in England.

Poverty is defined as households where resources are not meeting peoples’ needs. It is estimated that there are 4.2 million households in poverty. In other countries, there are examples of exemptions and reliefs for equivalent taxes that are linked to rent, allocation and quality conditions. There are also examples of capital gains taxation reductions for long term holding of properties, possibly promoting longer term tenancies.

ARLA Propertymark has highlighted to the CCHPR that any measures to improve the English private rented sector as a source of accommodation for people in poverty must be considered in the context of a shortage of social rented housing, a lack of supply, recent tax changes and the financial inability for people to purchase property.

As the private rented sector is left to house the nation, an increasing number of tenants now rely on housing benefit to pay their rent. However, problems in how Universal Credit is being delivered is creating rent arrears and forcing landlords to evict tenants as their only option. In February 2017, 34 per cent of ARLA Propertymark letting agents who we surveyed told us that they had seen a reduction in landlords renting to Universal Credit claimants, compared to 21 per cent who said they had not.

We’ve also highlighted the importance of existing landlords who want to expand and improve their property portfolios having new investment channels to tap into. For instance, the Government should reduce VAT on the purchase of materials and labour to improve older property brought onto the rental market and allow improvements to be offset against rental income rather than Capital Gains Tax.

Affordability is an issue in the private rented sector and Deposit Bond Schemes can help those who are unable to afford the deposit to be able to rent a home in the private rented sector. In addition, we believe the Government should be doing more to encourage employers to offer staff an interest free loan to pay for their deposit when moving into private rented property. Such a scheme can help staff secure a property without incurring financial difficulty leading to debt, and it can also help companies recruit and retain staff.

CCHPR are due to report back in September.

Read our full response