MP hints at buy-to-let tax breaks

Housing Minister John Healey has highlighted the need for more private rented property in the UK, and indicated his desire to see more Government support for buy-to-let lenders and facilitators.

Addressing the Fabian Society he pointed to the fact that fewer Britons are choosing to or able to buy homes, and more are turning to the private rental sector as a result. Healey said: “ It’s not just more rented housing in the public sector that we need, but more privately rented homes too.

“I want to expand the number of homes built for private rent and improve the quality and security of the private rented sector. That means supporting new institutions into this market, including through changes to tax support and incentives.”

He said that this is the first decade ever to witness a decline in homeownership, from 70.9% of all households in 2003, to 68.3% today.

Healy continued: “Some say the recession has shaken people’s desire to invest in bricks and mortar. But in reality, homeownership had been dropping since 2005. And I’m not sure that’s such a bad thing.

“At the moment, up to 70% of the population has their money tied up in property. The proportion was boosted by Margaret Thatcher’s Right to Buy. But you don’t need to be a grocer’s daughter to know that it’s not a good idea to have all your eggs in one basket.”

Healey explained that despite the drop in the housing market people still looked on their home as a store of wealth. He cited a recent article in The Telegraph which reported that nearly a third of people approaching retirement are still relied on their property to top-up their state pension.

Healey said: “Not only is this property piggy bank unsustainable, it is also unfair. Of course, not everyone will want to own property. So we need new choices in tenure – more opportunities for everyone to have a decent, secure, affordable home.

“That means increasing the diversity of tenures, it means allowing people to move more easily between tenures and it means putting them on a more equal footing with home ownership, as they are in other European countries.

“One great advantage of homeownership is that it allows you to build an asset and benefit from increasing property prices tax free. That’s why so many people choose to make their home their family’s main investment.

“If we want to make renting an equally valid option and an equally privileged option for those who want to rent, we need to extend that opportunity.

“That could be done with tax free savings for those who are renting, a deposit for homeownership in the future, a bond for renters to build assets and store wealth as homeowners do.”

Healey cited the need to make renting more stable, more secure, of a better standard, and probably more common an option as it is for people elsewhere in Europe.

He said: “Changing tenure may not mean changing your home, with options to release and buy back equity and convert from renting to owning with Government help.

“The vision I have set out today - very much as work in progress - relies on the state to support individuals in their specific circumstances.”

However, buy-to-let landlords are currently more concerned than ever about the State cracking down on them. A recent report from buy-to-let mortgage lender Paragon indicated that 58% of landlords are worried about the level of regulation required to run their property businesses this year.

Alan Ward, chairman of the Residential Landlords Association, noted it was not just the volume of regulation that was causing concern but also how it is applied. "To enable local authorities to achieve the targets set by government, they have harassed the generally well-meaning majority of landlords are just the low hanging fruit for box ticking bureaucrats," he explained.