The Government has estimated the number of landlords who will be affected by the new tax at one in five, but this is meaningless without knowing how many properties will be affected, about which it has no idea. It asserts that the tax rises will have only a limited impact on rent levels.
This is despite evidence to the contrary from my organisation, the Council of Mortgage Lenders and others, including a stark warning from a former member of the Bank of England’s monetary policy committee, David Miles, that rents would need to rise by between 20pc and 30pc for landlords to cope with the tax rises.
The irony is that this runs counter to the central tenet of the Government’s housing policy, which is to enable more people to be able to afford their own home. Rent rises will make it an awful lot harder for people to save for a deposit.
The Government’s last argument is that instead of hundreds of thousands of smaller landlords providing the extra homes that are needed for rent, the space will be filled by a few corporate investors. But a House of Lords Committee said last year that “efforts to bring large institutional investors into the sector have so far achieved little”.
Large-scale developers are also interested only in the cities and larger towns, leaving smaller towns and the countryside starved of affordable rented accommodation.
The housing minister rightly stated last year that “we need to build more homes of every type”. This Government can demonstrate a serious intention to address the housing crisis only by giving encouragement to the small landlords who make up the vast majority of the sector and can develop new homes to rent more quickly than the big institutions.