The Intermediary Mortgage Lenders Association (IMLA) has warned that Philip Hammond should not be tempted to raise finance from the private rented sector and/or buy-to-let in the Autumn Budget tomorrow.
Peter Williams, IMLA’s executive director, said: “Expectations are rising that decisive action on pushing back the decline of homeownership might emerge from next week’s Budget, but the private rented sector in general and the buy-to-let market particular must be no-go-zones for the Chancellor when it comes to raising revenues to solve the UK housing crisis.
“The private rental sector is already in danger of wilting under sustained pressure of government action, and the market is still in a state of flux due to the raft of regulatory changes imposed over the last two years. Far-reaching policies to reduce mortgage interest tax relief and raise stamp duty charges – at the same time as tightening underwriting criteria – are still new, and their effects have yet to fully bed in. The buy-to-let slowdown has already started and is forecast to continue, reducing further investment and portfolio expansion.
“The Chancellor is under increasing pressure to outline a solution to the housing crisis at Wednesday’s Autumn Budget. According to IMLA’s research, the majority of lenders agree this should take the form of increased efforts to boost overall housebuilding (79%) and more provide starter homes (58%). Further punitive tax and regulation on buy-to-let is not the answer, which could cause the supply of high quality rental accommodation to dwindle even further.
“Any action on further boosting housebuilding should be welcomed, but new homes won’t materialise overnight and the supply of affordable homes remains critically low. People still need somewhere to live while we fix the supply shortage: 4.3 million people are currently renting in the UK and rely on a well-served and well-supported private rented sector while trying to save for a home of their own. Further punitive taxation measures for landlords will reduce supply and put pressure on to raise rents, both causing more problems for the households who currently rent but hope to buy. Landlords are not the problem rather it is the lack of homes and not least affordable homes. That’s where the Budget should focus.
“We hope to see an Autumn Budget that is supportive of both ends of the property market, as one without the other will only worsen the UK housing crisis.”