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Buy to let agent calls for end to taxing times

28th February 2007 | back to article listings BACK    print this article PRINT

A leading buy to let broker has called on the government to give the industry a tax break to enable landlords who want to cash in on their properties a chance to do so.

Landlord Mortgages made the call today, arguing that preferential capital gains tax treatment should be given to those landlords who decide to sell to key workers or first-time buyers.

Managing director Lee Grandin made the call, pointing out that this would be mutually beneficial to both parties, with landlords currently facing an average bill of £48,600 (£4.1 billion collectively) while the government is keen to ensure more housing stock is available to key workers and first-time buyers.

He said: "The government has plans to significantly increase the UK's housing stock over the next 10 years to accommodate the increased demand for owner occupied homes.

"Therefore, we propose that tax breaks are offered to landlords who sell their rental properties to first-time buyers or key workers."

He added: "The relief could come in several forms, either a reduction in the overall amount paid or an increase in the period over which the tax can be paid."

At present, the situation for the property investment industry is healthy, with surveys from the Royal Institution of Chartered Surveyors and the National Association of Estate Agents published this week showing that tenant demand is high, not least due to immigration from eastern Europe.

At the same time, surveys appear to show a slowdown in mortgages, with the latest British Banking Association figures showing that the number of people taking mortgages was at its lowest for two years. This may suggest that interest rates are starting to deter buyers, but those trying to get on the housing ladder still face rising prices due to an increasing shortage of homes. Furthermore, locations where the increase in house prices has been greatest are struggling to offer affordable accommodation to key workers. In Aberdeen, a key centre for the North Sea oil industry, houses became 18 per cent more expensive over the course of 2006.

All this, of course, should be to the advantage of the buy to let market as those who cannot buy seek to rent, thus increasing demand. But if those who do rent out property in this way are able to cash in when the time is right or a change in circumstances demand it without getting a shock from the inland revenue, those very same would-be first time buyers and key workers could share the benefit.

How Gordon Brown, in what is almost certainly his last budget, decides to respond to Mr Grandin's call remains to be seen.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3316.html. Alternatively, please see our full press release archive.

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