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The Guardian - UK
The Guardian - UK
Politics
Robert Booth Social affairs correspondent

Landlords accused of ‘making up stories’ in drive to change UK tax rules

Houses for rent
Latest census data showed 5m households rented privately in England and Wales in 2021. Photograph: Nathan Stirk/Getty Images

Private landlords have been accused of “making up stories” about the state of the rented sector in an attempt to persuade the government to scrap UK tax measures forecast to cost them close to £1bn a year.

The allegation came after it emerged a lobbyist for private landlords in England and Wales, who has argued the tax rules have forced them to sell up in an “exodus”, said to allies it was “not terribly helpful” to have to acknowledge that the sector was actually increasing in size.

In a lobbying campaign targeting politicians, press, the Bank of England and the government, Ben Beadle, the chief executive of the National Residential Landlords Association (NRLA), had in recent months warned “landlords are selling because of punitive taxation” and of “decimated” supply hitting tenants. On Wednesday he met Michael Gove, the secretary of state for levelling up, housing and communities, about planned rent changes.

But Beadle this month told an industry webinar: “Actually the truth is that while some landlords are leaving the sector, this sector is actually still increasing. That’s not terribly helpful to our argument to be honest with you. But in the context of cost of living and rising costs we have to tell that story and link the two.”

Official figures support the notion the private rented sector is increasing in size. Latest census data showed 5m households rented privately in England and Wales in 2021 – equivalent to one in five – up from 3.9m in 2011, and the number of private renting households rose in England by 177,000 from 2021 to 2022, according to the English Housing Survey.

Beadle’s organisation wants restrictions on mortgage tax relief to be scrapped, arguing it would stop landlords quitting the market. He said this month in a press release that without tax changes, “renters face a bleak future as finding somewhere to live becomes increasingly harder”. Tenants, meanwhile, are complaining of huge rent hikes.

The webinar clip showed Beadle and the NRLA being “caught red-handed making up stories about a ‘shortage’ of rental stock so landlords can jack up rents and to scare politicians who should know better”, claimed the Conservative MP Natalie Elphicke, a member of the House of Commons select committee on levelling up, housing and communities. “But it’s England’s 11 million renters who are paying the price. Rents are spiralling, while landlords issue more than double the number of no-fault evictions than a year ago.”

Beadle’s admission about the landlord lobby’s “story” appears at variance with what he told an inquiry by that select committee into the private rented sector in September 2022, when he said: “We are already seeing landlords and, critically, homes leave the sector …. The exodus is well under way.”

He firmly denied misleading the select committee and said that when he gave evidence, official figures showed a decline in the number of private renting households.

“Since my appearance before the committee, new English Housing Survey data has been published, which has suggested the number of households in the private rented sector increased between 2020-21 and 2021-22,” he told the Guardian. “It was to this that I was referring on the webinar. However, my comments did not provide the full context. The latest English Housing Survey data remains an outlier when compared to all empirical evidence and other key industry data.”

Labour’s Clive Betts, the chair of the levelling up, housing and communities committee, said committees must receive accurate evidence and it would consider at a meeting on Monday “whether this has been the case and whether it is necessary to seek a correction to or explanation of the evidence”.

As part of what Beadle told the webinar was an “all guns blazing” start to its lobbying campaign this year, the NRLA put out a press release this month headlined: “Rental supply crisis worsens as landlords face growing mortgage costs.”

It also briefed the Bank of England, which wrote in its influential monetary policy report this month: “Demand for rental properties continues to outstrip supply as the number of landlords choosing to exit the market increased.”

The Bank said “contacts” attributed this to factors including “tax and regulation”. It said this was based on “qualitative intelligence” and relied on “soft” rather than “hard” data. Beadle confirmed the NRLA had briefed the Bank and said: “It is then up to the Bank what it decides to conclude based on the range of contacts and data at its disposal.”

Beadle was also pleased with a supportive piece by the Conservative MP Andrew Lewer in the House magazine, circulated to parliamentarians, which complained the tax system for landlords versus homeowners was “about as level as the South Downs”. “Anyone would think [these interventions] were linked,” Beadle told the webinar. “You may say that. I couldn’t possibly comment.”

With polls putting Labour on course for government, landlords face a race against time to get the tax rules changed. Beadle said Labour would never do so and so “now is our chance”.

Tom Darling, the campaign manager at the Renters’ Reform Coalition, said ministers must “disregard the landlord lobby’s attempt to confuse matters about the size of the sector”.

Beadle told the Guardian that despite his admission to the webinar that the private rented sector was increasing, figures from Zoopla showed tenant demand was up 46% on the five-year average, while the number of available properties was down by 38%. He said the Royal Institution of Chartered Surveyors had noted that while tenant demand increased, the number of new landlord instructions continued to fall, and that the property consultancy Savills had warned “surging demand and dwindling supply are driving rental value growth”.

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