Landlord tax crackdown has created a rental crisis, says Foxtons
Successive tax raids on buy-to-let investors have fuelled Britain’s rental crisis, the boss of Foxtons has said.
Guy Gittins, who heads up the London-focused estate agent, said private landlords have been driven away by a dearth of government incentives, which has reduced the number of available properties to rent.
The UK’s housing crisis has only worsened since the pandemic, he said, prompting the recent surge in rental costs.
According to Mr Gittins, the previous Conservative government “created an environment that was not attractive or profitable” for new landlords to enter the market.
He said: “It needs to be taken very seriously. We need anything that will encourage people back into the private rented sector.
“Ultimately, the UK needs tens of thousands, if not hundreds of thousands, of extra rental [homes] to manage the price growth and make sure it is tempered as much as possible in the medium term.”
Buy-to-let landlords have been put off by a number of tax and policy changes in recent years.
In the most recent Budget in March this year, Jeremy Hunt, the former chancellor, scrapped multiple dwellings relief, which gave buyers discounts on stamp duty when buying more than one property in a single transaction.
This came after the 3pc stamp duty surcharge introduced on second homes in 2016.
The Government has also pledged to bring back Rishi Sunak’s plans to ban no-fault evictions.
Mr Gittins is among a growing number of property bosses voicing their concerns that existing policies are deterring buy-to-let investors.
Last week Charlie Bryant, the chief executive of property listings website Zoopla, told The Telegraph that tax rises, red tape and high mortgage rates have meant that becoming a private landlord is no longer an attractive financial proposition.
The latest findings from Rightmove show the number of rental properties available was 20pc below pre-pandemic levels during the second quarter of this year.
The number of buy-to-let mortgages has also shrunk for the first time ever, according to trade body UK Finance.
Despite this, Foxtons’ current turnaround plan is bearing fruit.
In its half-year results on Tuesday, the estate agent posted an 11pc increase in revenue to ￡78.5m, while profits jumped 24pc to hit ￡8.5m.