Here are my thought’s on Budget 2017:
Budget 2017 was billed as being targeted on housing, but by focusing on house building the Chancellor virtually ignored the 20% of people who live in privately rented homes.
It’s all very well building more houses, but are renters going to be able to afford to buy them? A quarter of tenants have rented for at least 10 years, and almost half expect never to be able to buy. They can afford to pay mortgages as in most cases they’re paying a landlord’s mortgage! What they can’t afford is a deposit – and until they can save for that there’s no point cutting stamp duty.
Banning tenancy deposits and encouraging landlords and letting agents to turn to deposit replacement insurance would allow the average renter to save close to £1000 towards a deposit. It would also allow the £4.1bn currently held in deposits to be transformed into Help to Buy ISAs.
Housing in the UK needs fixing, but that doesn’t have to mean expensive gestures like the £44bn Budget 2017 promises for housing which we will be waiting a long-time to see the benefit from.
As we’ve said in response to plans to regulate the lettings industry this week, the government doesn’t need to build an entire new regulatory infrastructure to better regulate lettings. It just needs to amend the Housing Act to require letting agents to receive rent in arrears, allowing the Financial Conduct Authority to become the de facto regulator of renting.
Simple changes like this and reforming our out-dated, expensive and ineffectual deposit system would have an immediate impact on renting in the UK – at no cost to the Chancellor.
These are the housing measures Phillip Hammond announced in Budget 2017 today.
Ajay Jagota is Managing Director of Dlighted an heads the #ditchdepositsnow campaign, which seeks to persuade the government to add an additional deposit free renting option to the three government licensed deposit protection schemes – mydeposits, the Tenancy Deposit Scheme and the Deposit Protection Scheme.
Dlighted is a deposit-free renting solution which replaces traditional cash deposits with low cost deposit replacement insurance, allowing properties to be rented deposit free while providing landlords over £600,000 of protection against legal fees and property damage and a rent guarantee.