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Rental sector suffering from government focus on home ownership

Private tenants are being disadvantaged because of the government’s focus on boosting homeownership.

According to the latest figures from the Royal Institution of Chartered Surveyors, a fall in the supply of private rented housing whilst demand from prospective tenants increases is “likely to squeeze rents higher.” 

It says tenant demand has picked up despite the government’s efforts to boost homeownership and RICS notes that many respondents to its latest residential market survey saw a rise in the number of enquiries from new home buyers in July.


The Residential Landlords Association says recent tax changes - including restricting mortgage interest relief to the basic rate of income tax and introducing a three per cent stamp duty levy on the purchase of new homes to let out - have led some landlords to leave the market. 

This is despite the Institute for Fiscal Studies warned that it was “plain wrong”to argue that landlords were taxed more favourably than homeowners. 

The Chartered Institute of Housing has also noted that “tax reliefs deliver a much bigger benefit to home-owners than they do for private landlords.”

David Smith, RLA policy director, says: “These figures demonstrate yet again that hitting the private rented sector to boost homeownership serves only to hurt tenants.

“Demand from tenants and new buyers is increasing at the same time. It is vital that the needs of both groups are met.

“The government needs to stop making landlords the scapegoat for the housing crisis and embark on a raft of pro-growth measures to boost the supply of homes for the private rented sector. If they do not, supply will continue to fall, meaning higher rents, less choice, and a reduction in quality for tenants.”


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