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Budget Decisions Could Fuel Housing Crisis
Chancellor, George Osborne’s decisions to cut mortgage interest relief and reduce social housing rents by 1% have come under fire from two separate pieces of research.
A survey by letting agents Rentify, has revealed that 56% of landlords questioned intend to raise rental rates as a direct result of the reduction in mortgage tax relief from 45% to 20%. Over half of landlords also stated that they do not intend to increase their property portfolios and 23% said they were considering selling all their properties. HM Revenue and Customs had estimated the change would impact 20% of landlords, their estimates however fail to take into account those who own more than one property according to the Residential Landlords Association.
Social Landlords are also under pressure after Mr. Osborne introduced 1% cuts in rents over the next four years. Research by the District Councils Network (DCN) has found that a decrease in income which is estimated to be £10 billion over the next 30 years could result in 42,000 fewer homes being constructed.
DCN director Steve Atkinson said; “It is a concern that some activity has stalled already, as a result of this announcement and the level and speed of response from DCN member’s highlights just how strong are their concerns. It is to be hoped that a way ahead can be reached ultimately with ministers on this issue, so that district councils can continue to play their full part in delivering national house building ambitions.”