A new report by the Joseph Rowntree Association has proposed new incentives to encourage landlords to keep their properties up to scratch and to let to poorer tenants.
- Introducing a rental incentive allowance allowing landlords to offset a proportion of their rental income against tax if they let to tenants in receipt of Local Housing Allowance.
- Allowing the cost of certain improvements to properties to be set against income tax.
- Enabling local authorities to issue vouchers to priority households guaranteeing the payment of rent.
The report – which noticeably stops well short of proposing the abolition of so-called Section 24, which is currently phasing out landlords’ ability to offset finance costs against tax – says its proposals would be cost effective.
It says they would cost the taxpayer respectively £354m a year; £36m for the first year rising to £86m after nine years; and £170m a year.
The total cost would be considerably less than the £808m that the Treasury plans to raise by Section 24.
The report sets out both the current incentives – including feed-in tariffs for rental properties with solar panels – and the disincentives for landlords.
These include welfare cuts which mean that landlords are unwilling to let to tenants who they fear will not pay rent; long delays in evicting tenants; HMO licensing; right to rent checks; and increasing taxation.
An advisory group was used by the report’s authors, Anna Clarke and Michael Oxley, with consultants including ARLA and NALS.