Changes announced in last week’s summer Budget could in fact make the UK’s shortage of housing even worse, according to a property investment expert.
Simon Zutshi, founder director of CrowdProperty and the Property Investors Network, said that George Osborne’s decision to restrict mortgage interest relief for landlords from 2017 could, when combined with changes to the welfare system, constrict the supply of property further.
Zutshi said: “The UK is desperately in need of providing greater housing and accommodation and the private landlord sector is fundamental to that. The big risk is that these new Government initiatives will put off potential landlords at a time when there is a desperate need for more accommodation in the UK.
“It is often these ordinary or ‘accidental’ landlords, who provide cost-efficient housing to many young people and those on lower wages, who will be hit hardest.
“The Budget also announced several cuts to welfare and housing benefits which will potentially hurt many ordinary landlords who provide housing for tenants on Local Housing Allowances. Indeed many private landlords work entirely in this sector in order to help housing problems across the UK and whilst some efficiencies are encouraged, landlords will ultimately find it hard.”
Zutshi added that changes to social housing were likely to reduce the appetite for private landlords to rent to social tenants even further, reducing overall social housing stock. “This could potentially put more people on the streets. The government will have to look carefully at tackling this and ensuring other measures are introduced to prevent this happening.”