Landlords have warned Ministers that their ongoing attempts to dampen investment within the private rental sector are fuelling a supply crisis, hiking rents and making homeownership more difficult to afford.
The National Residential Landlords Association (NRLA) says that since 2015 this has included taxing the supply of new homes to rent through a three per cent stamp duty levy, restricting mortgage interest relief to the basic rate of income tax so that, unlike any other business, landlords are taxed on turnover rather than profits.
The NRLA is warning that these tax measures are fuelling a supply crisis in the sector.
“Ministers have been repeatedly warned of the damage that would be caused if they continued to attack the private rented sector,” says NRLA chief executive Ben Beadle (pictured).
“The supply crisis is completely counterproductive to the Government’s mission to turn renters into homeowners.
“By suppressing supply whilst demand increases, with rents going up as a result, they continue to make it harder for tenants to save for a home of their own.
Wake up
“The Chancellor needs to wake up to a crisis of the Government’s own making, scrap the tax on new homes to rent and review other measures which add to a landlord’s costs.”
According to recent data from research consultancy BVA/BDRC for the NRLA, 62 per cent of private landlords in England and Wales report heightened tenant demand in Q1 2022 – a record high.
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Over the same quarter more landlords (11 per cent) sold property than purchased new property (eight per cent), making the supply crisis even more acute.
This is having a predictable effect on rents. Official data shows that private rents across the UK increased by 2.4 per cent during the first quarter of 2022, the biggest leap since 2016.
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