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We need more tax reform to help rental sector, repeats trade body

The government should scrap the tax on new homes which is punishing those in need of a home to rent, the Residential Landlords Association says.

A report published today by the association’s research arm, PEARL, warns that the country faces a net loss of 133,000 homes for private rent over the next year. 

This follows government figures showing that between March 2016 and March 2017 England saw a loss of 46,000 private rented homes.


The RLA’s figures, based on questioning over 2,600 landlords, show that 84 per cent of landlords have seen tenant demand increasing or remaining stable. The Association of Residential Letting Agents has also found an increase in demand for private rented homes.

The RLA claims that much of the reason for the fall in supply has been the decision to restrict mortgage interest relief to the basic rate of income tax and the decision to add a three per cent levy on stamp duty for the purchase of additional homes.

Analysis by the RLA suggests that just two per cent of all private rented households in the UK are in homes developed by Build To Rent corporate investors and the association insists that the majority of landlords are, and will continue to be, individuals and small businesses, best positioned to support small and medium sized construction firms.

Now the RLA wants the three per cent stamp duty surcharge to be scrapped where landlords invest in property adding to the overall supply of housing. This includes converting empty offices and shops, turning large homes into small self-contained properties or bringing one of the over 605,000 empty dwellings across England back into use.  

“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” says RLA policy director David Smith.

“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.” 


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