Are MPs to Review Buy-to-Let Tax and Make Court Reforms?

The PRS continues to face numerous changes

Anyone with experience in the private rental sector largely acknowledges its role in the UK’s housing market. Yet, that doesn’t mean it hasn’t faced numerous challenges, both for landlords and tenants, some of which has seen landlords exiting the sector.

The UK government has recognised this and proposed a series of reforms to address these challenges, with the Levelling Up, Housing and Communities Select Committee recently releasing a report on suggested reforms.

Here, we look at what’s potentially in store for the private rental sector, including support for tax changes and court reform. 

Support for reforms

The National Residential Landlords Association (NRLA) expressed support for some of the proposals made by MPs in the Levelling Up, Housing and Communities Select Committee’s report. 

This is already positive, especially when you consider that NRLA has shown scepticism towards government plans in the past.

Chris Norris, Policy Director for the NRLA, said:

QUOTE: The association has always been in favour of reform in the sector, provided it is fair and workable for tenants and landlords […] The biggest challenge faced by many renters is the lack of homes to rent, and all the protections in the world will mean nothing if there are no homes available.

Need for court reform

Part of the reform suggestions comes in the form of the court. In its report, the committee recognises the challenges faced by private renters and acknowledges the need for court reform to underpin the government’s proposed tenancy reforms. 

The report calls for the development of a specialist housing court and the speedy processing of legitimate possession cases, especially in instances of rent arrears and antisocial behaviour by tenants.

It concludes that all forms of antisocial behaviour by tenants should be mandatory grounds for possession, even if a criminal conviction has not been made. 

Tax changes in the buy-to-let market

Landlords know all too well about the lack of tax relief available. 

Higher mortgage costs due to rising interest rates have led to many landlords exiting the sector. An online petition to revoke Section 24 and reinstall the ability to claim mortgage interest has already gathered steam online. 

Therefore, landlords will be pleased to know that the report also supports the NRLA’s stance on tax changes in the buy-to-let market and recommends a review of their impact on smaller landlords. 

It also recognises the challenges private renters face, particularly the high cost of renting due to rising costs for landlords, and calls on the government to address these issues.

Decent homes standard

Finally, the report welcomes the government’s plans for a decent homes standard, but highlights obstacles such as a shortage of qualified enforcement staff, precarious local government finances and a lack of data. 

It recommends a tougher civil penalties regime to ensure councils have the capability to enforce standards and collect financial penalties from landlords who breach them.

Change ahead

Reform in the PRS has been on the agenda for a long while, with many landlords unconvinced by many of the suggestions outlined. However, news of support from MPs for tax changes and court reforms will give landlords a boost in this new chapter of a long-running saga. 

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