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Rental market: leading figure slams government approach
| Author: Craig Bees | Published: 17th September 2019 09:06 |
Rental market: leading figure slams government approach
Regular readers of this column will know our thoughts on the dire shortage of rental properties and the lack of options for aspiring first-time buyers. Now a leading financial figure has added his voice with a stinging attack on Government policy or rather the lack of one.
David Miles, former member of the Bank of England’s Monetary Policy Committee and now a Professor of Financial Economics at Imperial College London, has said the government’s approach to the private rented sector is “incoherent”.
Miles has argued that contrary to the government’s stated aims, there are “few signs” that tax increases on the sector have benefited those hoping to become homeowners. He argues that they are, meanwhile, “left in a rental sector with reduced choice and where rents are likely to be higher as supply gradually shrinks.”
Since 2015 the government has introduced measures to restrict mortgage interest relief on the private rented sector to the basic rate of income tax and imposed a stamp duty levy on the purchase of new homes to rent out.
In an article for the Residential Landlords Association, Professor Miles attacks the government’s approach which has sought to cut investment in the rental market to support aspiring first-time buyers. He argues that such buyers “are hardly helped by squeezing the supply of rental property and driving rents up.”
He goes on to say that there is nothing “intrinsically wrong with people being in the rented sector for an extended phase of their life. We should want to avoid a situation where people feel pressurised into taking big mortgages relative to their income early in life because the rental option is so poor.
“In a world where house prices might be consistently higher relative to incomes than in the past we might naturally expect the period in which people are in the rented sector is longer. And there are good economic reasons for believing that in a country with a rising population and where real incomes tend to increase over time house prices might well rise at least as fast as incomes. To have then introduced measures that reduce the supply of rented property is perverse.”
David Smith, Policy Director for the Residential Landlords Association, added: “Professor Miles hits the nail on the head. Choking off the supply of rental properties does nothing to help aspiring home first-time buyers who need somewhere to live now.
“It is time to change tack and recognise that we need more homes to rent as well as to buy in order to meet growing demand and have policies that support investment.”
Badby & Farthingstone Cricket Club News: great turn-out for club’s open day a week last Sunday – 30 players, 40 guests, sunny weather made for a terrific afternoon with bbq, refreshments, raffle and a win for Nelly’s Gnomes in a hotly-contested inter-club competition. Thanks to all who took part and helped to make it such a fun day.
Curtain went down on the season last Sunday with a home loss to Crick Lions, who deserved their 40-run win in a competitive 40-over match played in a good spirit by both sides.
Looking forward to 2020 season already. Big thank you to all who have supported the club this summer and all the hard work done on and off the field, especially by the groundstaff who have worked tirelessly to get the ground looking as good as it does.
Monthly draw: still time to enter September’s draw and your chance to win a case of Italian wines (red/whites/mixed) or get one month’s membership to Whittlebury Hall Leisure Club.
How To Enter: every valuation and instruction for sale or rental between now and Wednesday Sept 25 2019 will be entered into the draw, the winners being notified by e-mail.
If you’re thinking of selling or letting your property and want to win one of these great prizes on offer call (01327) 359164 and speak to our sales or lettings team.
Until next time.
Craig Bees, MD Bartram & Co
E-mail me at craigbees@bartramandco.co.uk
Visit our website www.bartramandco.co.uk and follow us on Twitter@bartramandcotow
Tel: (01327) 359164
Fax: (01327) 359166
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