RLA : RPI : Unconvincing Arguments

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the August / September 1999 issue

Unconvincing Arguments - August / September 1999

It is as if the Government is determined to push private landlords out of the sector.

Recent months have seen a cap put on increases in regulated rents needed to bring them up to market rates. New rules have been proposed on HMOs that will in fact threaten the viability of letting many properties not usually considered to be HMOs at all. And now there has been a change in the rules on council tax on properties under repair.

From next April properties needing repair or structural alteration to make them habitable will be exempt from council tax for one year only after which a 50 per cent charge will apply.

'One of the reasons why there is a hard core of unused empty dwellings is the cost of owning them is relatively low', claimed Housing Minister Hilary Armstrong last month when justifying the change. This is to misunderstand the economic realities totally.

Landlords do not leave properties empty by choice. Neither do they leave them in need of repair or structural alteration if they believe they could rent them at an economic rent.

The return which a landlord can make on an investment has two elements - the revenue stream and the capital growth. In our response to the Government on Licensing of houses in multiple occupation - England, the RLA points out that there is no trading marketplace for rented properties. Add that to the penalties on renovation implied within the council tax changes - and the Government reinforces the message that it neither understands nor cares about the long term viability of the private landlord.

Let the Chancellor show in his next budget that fiscal policy encourages improvement and reinvestment - and we'll know someone can see the bigger picture.

Martin J Moylan

other artilces from the August / September 1999 issue

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