It goes without saying that there are no easy solutions to the UK's housing problems. With a growing population and increasing attractions for people to come to London, both from within the UK and around the world, London has exceptional pressures. We need to build more homes of all tenures in the capital to keep up with demand.
This month the NHBC have reported very welcome news that in London, the number of new home registrations made in 2013 - total of 26,230 - was the highest since records began more than 26 years ago, an improvement of 60% on 2012. We need significant further advances on this figure in the coming years to keep up with demand, but genuine progress is being made, which is welcome.
However, after decades of under delivery of new homes, we need to help bring relief to housing pressures in the short term and medium term while we catch up on building. That is why I am supporting a new campaign by the UK's leading flatshare website SpareRoom.co.uk and supported by Shelter - 'Raise the Roof'.
The campaign has a very simple aim, which has the chance to deliver a real change for London's rental market - to increase the Rent a Room Scheme tax-free threshold from £4,250 to £7,500 per year.
Under the scheme, householders can receive tax-free rental income on their spare room(s) up to the threshold amount. This is not only simpler for the taxman and the householder, but also encourages those with extra space to rent it out.
The campaign calculates that homeowners are sitting on 15 million spare bedrooms in England. Encouraging them to let those rooms by raising the Rent A Room Scheme threshold will not only help them cope better with rising living costs, but will also go some way to solving the supply issue in the short and medium terms.
With 7.7 million one person households in the UK, a figure that has grown by over 500,000 in the last 10 years, helping tackle loneliness is an added benefit. Nearly a third of London's household comprised one person living alone, the vast majority of which are of working age.
This simple but effective change is needed as the current Rent A Room threshold discourages people from letting rooms for fear of falling foul of the tax man, but raising the threshold to reflect market rents would alleviate that concern for many and reduce the pressure on the hyper competitive rental market within the capital and across the UK.
The shocking facts are:
- The Rent-a-Room scheme tax free threshold has not changed, even in line with inflation, since 1997
- There are no areas in London with average room rents under the current threshold of £4,250 per year
- Only 33% of rooms in the UK are under the threshold with the average annual rental in the UK currently at £5,593
The Chancellor will deliver his 4th Budget on 19th March. Now is the time to Raise the Roof on the Rent A Room threshold.
For further information about the campaign please visit SpareRoom.co.uk/raisetheroof