These suggestions have been made ahead of the Spring Budget next week, with the lender saying increased regulation and taxation was causing landlords in the private rented sector (PRS) to struggle.
It said that, along with higher interest rates, landlord incomes were falling and resulting in increased rents as well as fewer funds to improve homes. TMW said this would impact the effort to make properties more energy efficient.
The lender, which reduced rates last year, said these circumstances were making things worse for tenants.
TMW’s proposals include a moratorium on all new regulations in the PRS, except for what is necessary after the Renters Reform Bill has been introduced.
It said landlords had faced a “barrage of regulatory changes” and requested the Renters Reform Bill be passed as soon as possible. It said there should then be a period for changes to be made.
TMW said a moratorium would give landlords certainty, give them time to improve homes and allow the government to assess the impact of the bill.
Landlords should also be incentivised to make their properties greener, as TMW said failing to do so would negatively impact tenants and make the climate crisis worse.
It said energy performance improvements should be deductible against rental income for tax purposes.
The lender also suggested increasing funding for social housing and ensuring there was enough to deliver 90,000 additional homes each year into the sector.
It was also proposed that the government review changes made to mortgage interest relief and landlord taxes. TMW said the Treasury should look at the impact of getting rid of mortgage interest relief and consider bringing it back to prevent landlords from leaving the sector due to costs.
TMW said the three per cent stamp duty surcharge on landlords should be reviewed as it was a barrier to new landlord entrants, potentially stopping them from providing more rental homes.
Current landlord taxation is ‘counterproductive’
Damian Thompson (pictured), director for The Mortgage Works, said: “Landlords are a partner for the private sector and the government in driving the economy forward. The PRS provides homes for where the UK workforce is needed most. However, the current taxation system is counterproductive, hampering progress within the UK economy, and negatively impacting tenants and landlords.
“Without the government permitting landlords to offset mortgage interest against their rental income or making equivalent interventions, tenants will face reduced choice, increased rents and potentially less well-maintained homes, and the UK economy will suffer as a result.”
