TUC calls for empty homes tax

The Guardian reports that the TUC want an empty homes tax.  It’s good to see that the number of empty homes in the UK getting some press.  Of course, this is a politically appealing act that would still exempt people who put in a caretaker in a vacant house, or a older person alone in a large house.  In reality the burden of taxation should be moved onto housing so that opportunity costs become explicit to those who choose to keep properties underused or empty.

A welfare state for home owners

Following on from the post on the welfare state for landlords, now the government wants to keep house prices high by engaging in mortgage lending.  It’s off topic, I know, but if the government felt no need to control prices on the way up then why the sudden rush to prop it up?

A welfare state for landlords

This essay is very interesting:

In terms of privately rented housing in the last 25 years, the single biggest change in housing law was effected by the Housing Act 1988. This abolished rent control from January 15th 1989 and brought in the Assured Shorthold Tenancy, the most common form of private rental agreement today. Its impact and knock on effects have been enormous. Problems with high rents, inflated housing benefit levels, high levels of tenant debt lack of security and summary repossession all derived from this piece of legislation.

And the problem of median rents isn’t even mentioned.

Tax loophole for second home owners to be closed

The EU is forcing the British government to end tax breaks on owning second homes.  Not that you’d know it looking at the headlines:

• Holiday home owners face annual ’stealth charge’ of thousands of pounds (Daily Mail)
  
• Second home owners face stealth tax in Pre-Budget Report (Telegraph)
  

This story is being reported in entirely the wrong way.  Tax breaks need to be justified, and second home owners would seem to be a unlikely lot for a break given the size of fiscal deficit we are facing.  Given that we supposedly face a housing shortage:

• Housing shortage creates underclass (Daily Mail)
• Village life under threat due to lack of affordable homes (Telegraph)

you would think removing a tax break for holiday homes might actually be a good idea that would help rural communities by reducing demand on scarce housing.   However, those journalists seem incapable of looking into even their own archives.

This is the tip of the Iceberg when it comes to the bad shape of property tax in the UK.  I recently heard of two retired couples who would rather bounce around in their huge homes for a few more years than pay the £50,000 stamp duty bill they will face when selling.  This is exactly the wrong incentive - moving house creates employment for many trades, facilitates labour mobility and allows people to free up housing that is too large for them.  Current tax policy actively discourages this. Even worse, it makes tax receipts dependent on how many people move house, which is at an all time low.   Time to tax housing properly, as it is in every other developed country.

Private Landlord database to be fast-tracked?

It appears that the communities secretary, John Denham, wishes to Fast Track the legislation required to introduce the proposed database of every private landlord in the country.

Sadly, what might be seen as a sensible and small step in the right direction, is vociferously opposed by many of those who it seeks to register.

Whether on the grounds that agreeing to a minimum standard of conduct and registering as a landlord is too “beurocratic”:

“The last thing the Government should be doing at the moment is discouraging homeowners from taking in lodgers by over-legislating and forcing people to sign up to a national register,”

said Matt Hutchinson, director of Spareroom.co.uk, a house share website.

“Falling property prices have left thousands of homeowners in negative equity and struggling to make ends meet, and being able to bring in some extra income by taking in a lodger has proved a lifeline for many people.”

or over fears that the database will be used by tax officials to track down those who are evading the correct tax payments on their investments:

Richard Price, director of operations at the National Landlords Assoc, said he was also against any extension to spare-room landlords:

“There should be more effective ways for HMRC to find tax evaders that do not result in homeowners withdrawing their contribution to the housing shortage.”

Revenue and Customs admitted yesterday that it has few details about tax income from private landlords, as it is split between personal self-assessment forms and corporate returns. Nor does it have any idea how many evade payments.

Officials from the Department of Communities and Local Government said that the measures were not intended as a tax crackdown but to strengthen local authorities in tackling bad landlords with a record of exploiting vulnerable tenants. Those failing to undertake essential repairs or improperly not returning deposits would incur penalty points and serial offenders would be struck off the register and barred from letting their properties, he said.

source: http://property.timesonline.co.uk

Shelter calls for stronger regulation of the private rented sector.

The Government has completed its consultation on a proposed internet based register for all landlords, suggesting that this would help remove bad landlords along withe educating new landlords of their responsibilities.

However, Shelter says that many of the three million private rental households will continue to be let down unless the regulation system is more robust.

Shelter chief executive Sam Younger: ‘With more people now entering the private rented sector, either as a tenant or a landlord, it is now time to bring this sector up to scratch and create a better deal for everyone involved.

‘We cannot continue to recognise the importance of licensing and regulation for other sectors, whilst failing to properly regulate a sector that is responsible for housing three million households.’

Source: www.shelter.org.uk

The Conservative’s Green Paper on Housing - Nothing for Tenants

With the implosion of Gordon Brown’s government happening before our eyes, it’s worth looking at Conservative policy on the privately rented sector.  They have a green paper on their site.  It’s 40 pages and goes into some detail on the housing market.  Nevertheless, I can quite easily quote the whole part on the private rented sector as this weighs in at four paragraphs:

The private rented sector constitutes a significant component of the housing market, accounting for 13 per cent of the 22 million homes in England.Often unfairly seen as a fallback option for those who cannot afford to buy but are not sufficiently in need to qualify for social housing, the private rented sector plays a key role in meeting the accommodation needs of millions of households, many of whom greatly appreciate the flexibility and variety that the sector offers.
Yet the sector has the potential to play an even fuller and more effective part in meeting the country’s future housing needs. Private landlords could play an important role in bringing under-utilised or empty homes back into occupation. Individual landlords are also capable of delivering small developments and conversions on sites too marginal or too difficult for larger businesses to undertake. Single operators can quickly and effectively
operate at low margins on brownfield sites.
We will conduct a review of the private rented sector to examine how the sector can play an enhanced role in the housing market. As part of this review, we will look at how consistent and appropriate the current regulation of the sector is, as well as evaluating the cumulative effect of the statutory regulation on landlords.
We will look to eliminate duplication and contradiction, and ensure regulation is proportionate to risk – focusing on public safety and rogue landlords. In so doing, we will end the uncertainty Labour have created about investment in private renting, re-establishing confidence and so encouraging the provision of much needed private sector housing for rent.

There you have it.  This is by a wide margin the smallest section in the paper (energy efficiency gets four pages) and really promises only to conduct a review aimed at making investment by landlords easier.  Nothing on our favourite themes of security of tenure and long term leases.

It seems the tenant cannot expect any help from a Conservative government.