The Residential Landlords Association (RLA) has released a new report that agues the need for ministers to scrap the tax on new homes, which is punishing those in search of a home to rent.
The report was published by the UK’s leading landlord body today, by its research exchange, PEARL. It warns that the country is facing a net loss of 133,000 homes for private rent over the next year, following Government figures showing that between March 2016 and March 2017, England saw a loss of 46,000 private rented homes.
These figures were based on the questioning of over 2,600 landlords, and show that 84% have noticed that tenant demand is either increasing or remaining stable. The Association of Residential Letting Agents (ARLA) has also noticed this trend for growth in the demand for private rented homes.
This fall in supply is considered to be largely due to the decision to restrict mortgage interest tax relief, as well as the 3% levy on Stamp Duty on the purchase of additional homes.
Efforts are being made to fix the issue with the supply of housing in the UK, with the Government’s target to build 300,000 new homes a year being supported by its recent decision to open up investment opportunities.
The Government has also been working to boost the supply of homes to rent by corporate developers. However, analysis by the RLA suggests that only 2% of all private rented households in the UK are in homes developed by corporate investors.
In order to further boost the supply of homes to rent, the RLA is calling for an end to tax on new homes. It is believed that the 3% Stamp Duty levy should not be applied to landlord investments that add to the overall supply of housing. Included in this should be the conversion of empty offices and shops, and large homes being made into small self-containing properties. The RLA also believes that Stamp Duty should not apply in the case of a landlord bringing one of the over 605,000 empty dwellings across England back into use.
The RLA Policy Director, David Smith, said:“The demand for private rental homes shows no signs of slowing up, despite efforts to encourage home ownership. The government was always mistaken to place homes to own and to rent in opposition to each other rather than seeking to supply more homes in all tenures.
“Corporate investors are failing to provide the new homes to rent at the pace and scale we need. They are also poorly equipped to meet the housing needs of towns and rural areas.
“The vast majority of landlords are individuals and small businesses, providing good housing to their tenants and supporting local economies. We need to support and encourage them to provide the long term homes to rent needed.
“The government should use taxation more positively and not penalise landlords who are contributing to badly needed homes to rent.”