With the number of homes coming up to let in short supply, the Residential Landlords Association (RLA) is calling on the government to reconsider the way landlords are taxed.
With over 25% of UK households predicted to be privately rented by 2025, rental demand continues to grow. But the latest figures reveal an alarming decline in the number of residential properties to rent, adding to the growing supply-demand imbalance in the rental market.
According to new data published yesterday, the number of homes for private rent in England declined by 46,000 between March 2016 and March 2017, as buy-to-let investors were deterred by the introduction of the 3% stamp duty surcharge for the acquisition of buy-to-let homes, along with the government’s decision to press ahead with the phased reduction in mortgage interest relief for the sector to the basic rate of income tax.
In March, the Prime Minister Theresa May offered a speech, during the launch of the new National Planning Policy Framework, in which she argued that “rents come down” when “supply goes up.” However, with supply falling, the signs are that rents will rise in the near future.
The latest figures from ARLA Propertymark reveal that almost a quarter - 23% - of tenants saw their rents increase in March, which is the highest level seen since September 2017 when 27% of landlords put rent costs up for tenants.
The RLA’s Policy Director, David Smith, commented: “The figures [from RLA] show that tax hikes on the sector are choking off supply and making it difficult for prospective tenants, many of whom cannot afford to buy a home of their own, to access the homes to rent they need.
“At the same time that the Ministry of Housing has published its corporate plan in which it pledges to support the delivery of one million homes by 2020, this is hardly an auspicious start.
“Delivering homes just for those who can afford to buy is not a policy which meets the needs of many less fortunate households in the UK.
“With corporate investors still accounting for only two per cent of the private rental market, it is time to develop pro-growth taxation that supports the majority of landlords who are individuals or small businesses to invest in the new homes to rent we desperately need.”