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CGT hikes will rock UK private rental market: Kensington

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  • 10/06/2010
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With over two thirds of Brits unable to get on the property ladder, raising Capital Gains Tax (CGT) will destabilise the rental market these people rely on, said mortgage lender Kensington.

The lender is lobbying the government ahead of the emergency budget on 22 June to flag the growing importance of the private rental market.

Kensington research showed of the 3% of people or 7.98 million renting their homes in the UK, 66% of them said they are unlikely to buy a home by 2015. This figure rises to 74% for the 35 to 44-year-old age group, the average age for independent buyers with no parental support.

Pessimism about home ownership in general is high and 68% of those surveyed expect demand for privately rented accommodation to jump over the next five years.

Renting is more popular among the young, with three out of five 18 to 34 year olds renting from a private landlord against just 5% of people over 45. House prices in the Capital have made renting most popular in London, whereas renting is least popular in the East of England.

Of those who can’t afford to buy, 32% would prefer privately rented accommodation over the 26% who preferred a housing association flat, or 14% who preferred living rent free with family or friends.

Keith Street, head of Kensington, said: “With a growing population and difficult outlook for first-time buyers the strain on the private rental sector will only increase

“It is therefore vital that there is the housing stock available to meet this demand and we – that is both lenders and the Government – need to encourage landlords to build and maintain portfolios for the long term so that tenants continue to have a choice of good quality, affordable rental accommodation to meet their housing requirements.”

Street added:” With this is mind, Kensington would therefore urge the government to consider the impact that any proposed changes to capital gains tax (CGT) may have on landlords. If changes are too onerous and discourage property investment they will not only impact on landlords, but also the millions of people who rely on private rental property to house them and their families.”

 

 

 

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