Housing: Lettings

Baroness Gardner of Parkes Excerpts

Monday 26th July 2010 Lords Chamber

Asked By

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government whether they will encourage the letting of residential properties by classifying them as businesses in the same way as holiday lettings.

[Baroness Gardner of Parkes]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I remind the House that I have a declared land and property interest in the Register of Lords’ Interests.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the tax system already treats both holiday lettings and residential lettings as businesses. However, furnished holiday lettings can benefit from some of the more generous tax rules for trades. This reflects the fact that they offer extra equipment and services in order to compete with hotels and guesthouses. We have no plans to extend these rules to other property businesses.

[Baroness Gardner of Parkes]

I thank the Minister for that disappointing reply. Is he not aware that if you have holiday lettings, you can roll over capital gains and therefore there is every encouragement to extend your business, whereas if you are a private residential landlord, you do not have that? Furnished holiday accommodation can only be let to anyone for a maximum of 31 days. Surely there is a desperate need for long-term residential accommodation in this country.

[Lord Sassoon]

My Lords, I fear that there is more disappointment coming. I had one grandparent who came from the great state of New South Wales and one parent who was educated there, and I thank my noble fellow Australian for her Question. However, the Government have no plans to change the tax or other arrangements for tenancies in the private rented sector. Since the assured shorthold tenancy rules came in in 1988, the private rented sector has grown steadily and responded flexibly to changes in the wider housing market, and some 21 per cent of tenancies now last for five years or more.