A lettings trade body says a major house builder has blamed, in part, recent tax increases on private landlords as a reason for not increasing its housebuilding.

The Residential Landlords Association says Berkeley Group, in a trading statement, claimed that a fall in demand by domestic buy to let landlords was one of a number of reasons why it would be impossible to boost housing supply, beyond its current plans. 

It cited especially the decision to restrict mortgage interest relief to the basic rate of income tax and the three per cent stamp duty surcharge on the purchase of new homes to let out. 

It noted the importance of supporting landlords who, it said, “buy early in the cycle and provide security of cash flow to enable complex, capital intensive developments to be brought forward.”

Recent research by the Residential Landlord Association’s research exchange, PEARL, has found that of the almost 3,300 landlords responding to its survey, 69 per cent said that the stamp duty levy, introduced in 2016, is putting them off investing in further rental property.

“We have long warned the government of the dangers of its tax raid on the private rented sector. Now we see its impact, with investment in new homes slowing and house builders not confident to up their levels of house building” says David Smith, policy director for the RLA.

“Rather than taxing new homes, it is time for smarter, pro-growth taxation that recognises the rental market as a crucial part of addressing the housing crisis.”