More protection for tenants and urgent aid to address housing shortage needed, says ARLA

Nia Williams

April 16, 2009

· Greater protection for private sector tenants during the economic downturn;

· Incentivisation for private sector landlords to improve the quality of housing stock;

· Reform to mitigate the adverse impact of Stamp Duty on larger investor landlords.

Greater tenant protection

On the issue of greater tenant protection, Ian Potter comments: “ARLA calls on the Government to ensure lenders give tenants at least two months notice of an eviction after a repossession order has been granted.

“This would rest the issue of blame with the landlord if the mortgage is defaulted provided that the tenant has kept up to date with their rental payments. It will also allow the tenant more time to find alternative accommodation.”

Improving housing stock

On the issue of UK housing stock quality, Ian Potter comments: “A quarter of the accommodation provided in the private rented sector is in dire need of improvement. The Government should incentivise landlords to improve the quality of UK housing stock.

“It is ARLA’s opinion that the Government should implement the following initiatives:

Remove VAT on the purchase of materials and labour for capital expenditure to improve older property brought into the rental market;

Introduce capital allowances for landlords improving housing stock over a certain age;

Increase the Landlords Energy Saving Allowance (LESA) to include the installation of central heating systems.”

Stamp Duty

On the issue of stamp duty, Ian Potter comments: “Larger investor landlords can be put off buying blocks of property as Stamp Duty is based on the total value of the transaction, rather than value of individual properties within the block. This almost always has the effect of the duty being at the highest rate.

“Again, Government incentives could be provided to purchasers of older property where a survey report and an Energy Performance Certificate show a property is likely to benefit from investment.

“Where this is the case, and the landlord completes the work within a period of, 12 months from purchase, the stamp duty could be refundable. There could also be a “clawback” facility whereby the Government could claim back the refunded stamp duty if the property was not kept for a given period, say 10 years, as a rental property.”

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