Increasing the private rental sector would boost the government’s coffers to the tune of £10bn, the National Residential Landlords Association has argued.
The assessment follows the submission of NRLA’s proposal to the government ahead of the Spring Budget in March, amidst a “supply crisis” in the rental market.
NRLA chief executive, Ben Beadle, said: “The chancellor needs to pull out all the stops to tackle the housing crisis.
“Growing the private rented sector is not only vital if tenant demand is to be met, but it would also provide a substantial boost to Treasury coffers, enabling it to invest in vital public services.”
Beadle argued it makes “no sense” to discourage investment in desperately needed private rented accommodation and that inaction will “only result in more misery for prospective renters”.
The association added that research findings suggested an average of 11 prospective tenants now make enquiries about every available property to rent.
Stamp duty
The NRLA pointed to analysis by Capital Economics which revealed how scrapping the 3 per cent stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes made available across the UK.
As a result of increased income and corporation tax receipts, Capital Economics’ modelling indicates this would lead to a £10bn boost to Treasury revenue over the same period.
This is the equivalent of almost the entire £11.5bn affordable homes programme budget for 2021 to 2026.
As a result, the NRLA is calling for the chancellor to scrap the stamp duty levy at the upcoming Spring Budget.
This view has been shared by Institute for Fiscal Studies director, Paul Johnson, who warned in an article: “The more harshly that landlords are taxed, the higher rents will be”.
The stamp duty levy was introduced in 2016 by then chancellor George Osborne who argued that it would be prevent landlords squeezing out families who want to become homeowners.
tom.dunstan@ft.com
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