The Joseph Rowntree Foundation commissioned CCHPR to investigate how to improve the English private rented sector as a source of accommodation for people in poverty. The project explored whether taxation could be used to incentivise private landlords to improve the affordability, conditions or security of rented housing.
The Joseph Rowntree Foundation commissioned the Cambridge Centre for Housing and Planning Research to investigate how to improve the English private rented sector as a source of accommodation for people in poverty. This project, with support from PwC and a panel of academic experts, explored whether taxation could be used to incentivise private landlords to improve the affordability, conditions or security of rented housing.
The rise in the private rented sector in England has led to growing numbers of households facing insecurity and high costs. The sector also has the highest rates of disrepair. There is therefore growing concern to improve the PRS, especially for families. CCHPR’s recent work for the JRF highlighted the huge difficulties facing low income groups at risk of eviction and forced moves, often resulting from affordability difficulties and the use of ‘no fault’ (S21) evictions.
There is therefore interest in exploring whether fiscal and non-fiscal measures could be used to incentivise private landlords to improve the affordability, conditions or security of rented housing. Our previous work on landlords’ views of a variety of rent control measures found that landlords were much more likely to consider offering longer tenancies if tax incentives were offered.
In other countries, there are examples of exemptions and reliefs for equivalent taxes that are linked to rent, allocation and quality conditions. There are also examples of capital gains taxation reductions for long term holding of properties, possibly promoting longer term tenancies. This project investigated the viability of applying incentives inspired by practice in other countries. These incentives for landlords or investors have the potential to improve the delivery of acceptable standards and tenancy conditions to private sector tenants in England.
JRF PRS Landlord Incentives: International Policy Review
CCHPR's report, produced in partnership with the Joseph Rowntree Foundation, identifies and reviews policy interventions used in other countries to improve the private rented sector for people in poverty. From this information, a shortlist of examples thought to be worthy of consideration for use in England has been drawn up. A final selection of three proposals will be fully costed for the final stage of the project.
JRF PRS Landlord Incentives: Three Costed Solutions
CCHPR's report for the Joseph Rowntree Foundation sets out three possible policy options for using incentives to improve the private rented sector in England for people in poverty.
These three costed policies have the potential to improve access to housing, affordability, housing quality and security of tenure. The report shows that the costs of the three proposals is much lower than the £808 million annual increase in tax revenues by 2021–22 that the Government anticipated making from restricting finance relief for landlords to the basic rate of income tax.
The three policy options are:
- Introduce a Rental Incentive Allowance, enabling landlords to offset a proportion of their rental income against tax if they let their property to households in receipt of Local Housing Allowance.
- Boost incentives to improve the quality of property by allowing specified improvements to properties to be tax deductible against income tax, rather than Capital Gains Tax.
- Improve access to housing by enabling local authorities to issue vouchers to priority households, guaranteeing the payment of rent.