Government policies are discriminating against UK based investment in the housing market by making it easier for foreign investors to purchase properties.
This allegation has been made by the Residential Landlords Association (RLA) in its submission to the Treasury ahead of the budget in March.
In the Autumn Statement it was announced that a 3 percentage point levy would be added to Stamp Duty for the purchase of buy-to-let property, except where 15 or more properties are being purchased at once. As the vast majority of investment in UK rental housing has been made by small landlords owning just a handful of properties to rent, this measure discriminates against them in favour of larger investors, many of whom are likely to be from overseas.
The RLA is calling for all new build properties contributing to a net increase in the housing stock to be exempt from the stamp duty levy. A survey of more than 1,100 landlords by the RLA found that 30% would be more likely to buy new properties if this were the case.
With the Office for Budget Responsibility uncertain about the likely impact of the Stamp Duty changes, the RLA is calling for the Government to give more time to consider the implications of the policy given the potential ramifications on housing supply and rent levels. Ministers have indicated that the policy will be implemented from 1 April despite the consultation having not yet been concluded.
RLA chairman Alan Ward said: “It is astonishing that a Conservative chancellor is leaving the way open for foreign investors and cutting opportunities for individual UK landlords. This additional assault on private landlords coming on top of changes to the taxation of rental income will only lead to reduced supply and higher rents
“The chancellor’s planned changes to Stamp Duty came as a bolt out of the blue. Regardless of the Government’s plans for home ownership, demand for rented housing is only set to increase.
“The Government needs to understand that not everyone will be able to afford to buy a house or indeed want to, even if more houses are built. Its whole policy towards the private rented sector needs to change. If it does not, it will only make the housing crisis worse.”
The RLA is also taking advice over whether the Government’s changes to mortgage interest relief, announced in the 2015 Summer Budget, are a breach of the Human Rights Act and European Union Law on free movement of capital.