The government is driving landlords into the short let sector according to a trade body.
The Residential Landlords Association, responding to recent reports highlighting the proliferation of Airbnb-style short lets, says tax changes brought in by the current and recent governments have forced landlords to consider ways of recovering their income.
The full impact of the restriction of mortgage interest relief to the basic rate of income tax applies from April, says the RLA, making many landlords significantly worse off or even unable to make a profit on their lettings.
This change does not apply to landlords with short-term lets so encouraging long-term landlords to move into that market.
According to the association there is mounting evidence that this, along with the three per cent stamp duty levy on the purchase of extra housing and other measures affecting landlords’ confidence, is causing a drop in the supply of long term rented homes when demand continues to increase.
Some reports claim as many as 25 per cent of homes in some areas are now listed on Airbnb.
David Smith, policy director for the Residential Landlords Association, says: “Government policy is actively encouraging the growth of holiday homes at the expense of long-term homes to rent which many families need.
“This is completely counterproductive, making renting more expensive and undermining efforts to help tenants save for a house of their own.
“The Chancellor must use his Budget to give tenants a better deal by supporting good landlords to provide the homes to rent that they want to live in.”