BTL growth is contributing to the housing crisis by pricing FTBs out of the market, claims the Chartered Institute of Housing…

Consequently, The government has been advised to cut the tax relief on BTL properties to assist FTBs as much as possible with gaining their first step on the housing ladder.  

President of the Chartered Institute of Housing (CIH) Paul Diggory commented:

“Growth in the buy-to-let market is contributing to the housing crisis by pricing first-time buyers out of the market. Tax relief received by buy-to-let investors is to blame and should be scrapped immediately”.

BTL tax relief allows buyers to offset the running costs of properties against the tax paid on rental income, which often corresponds to the interest payable on the mortgage.

BTL owners have ‘financial advantage’

Diggory added: ‘Buy-to-let owners have a financial advantage over those trying to buy their first home, as well as the unintended consequence of pushing house prices even higher.

“The Government has acknowledged there is an acute lack of affordable housing across the country, so it does not make sense to still offer tax relief to those who buy, simply to rent. ‘

The CIH wants the Government to tackle the issue of tax relief in the comprehensive spending review in the autumn, with the ultimate hope that  the Chancellor of the Exchequer will dispense with it altogether.

Diggory concluded:  ‘Investors can make money from rising house prices without having to let the flats to tenants – they are buying whole floors or entire blocks off-plan.

 ‘We want more done to halt the rise in the buy-not-to-let market. If you wander round some of the new developments in our cities after work you can see there are no lights on’.

Source: Press Release - CIH