‘Up to six landlords a month pulling out of rental market’
A ‘FLOOD’ of landlords are continuing to leave the rental market, and current tax relief proposals do not go far enough to stem the flow, the Guernsey Private Residential Landlords Association has warned.
Chairman Jeff Guilbert has welcomed the Policy & Resources Committee’s proposals to freeze residential-let property mortgage interest relief, but was concerned they did not go far enough.
‘Any help is welcome, but we need a little more help to keep people in the industry,’ he said.
He estimated that five or six landlords were leaving the industry each month.
Many smaller landlords in Guernsey are said to be ‘accidental’ landlords, such as islanders inheriting a property or a couple moving into one home, and then the spare homes are rented out.
As those landlords hit their 60s and cash in their property, which some have seen as their pension, it has led to fewer available rentals, he said, though States figures show the market to be almost static from 2021 to 2023 at about 6,750.
Mr Guilbert said worries about the prospect of increased legislation discouraged landlords from staying in the market.
There were also issues with the occasional bad tenant, which could wipe out a year’s worth of rent to conduct repairs.
‘It is becoming a hassle to rent properties,’ he said.
And against these worries, landlords were often only getting 3% net returns on their investment.
Mr Guilbert said that led some to save or invest rather than go into property.
‘We have to try to get more, younger landlords involved.'
‘But at the moment, with the return, for many it is easier to give it to finance houses instead. They are not choosing property.’
He said businesses in Guernsey were given various tax relief options, but professional landlords often did not qualify for them, so lacked support.
There is a statutory repairs allowance, allowing tax relief on certain aspects of property maintenance, but landlords get no tax relief on other maintenance and management matters, like new carpets, travel to inspect a property, or making improvements.
The Budget also proposes introducing a rent-a-room tax relief for personal taxpayers who let up to two rooms in their property.
Mr Guilbert said while this would help the rental sector, it was unlikely to make a meaningful difference.
‘It is all well and good, but you have to have professional owners [as well],’ he said.
