Private landlords groups have written to Rachel Reeves to urge the government to offer tax breaks amid “market uncertainty” ahead of the Budget.
In a letter to the Chancellor prior to the 30 October fiscal statement, representative bodies including the National Residential Landlords Association (NRLA) said their members face “uncertainty on a number of fronts” and require stability and clarity from the government.
They urged ministers to “reconsider the way the private rented sector is taxed” and cited Institute for Fiscal Studies (IFS) Paul Johnson who said it had “become increasingly penal”.
Johnson added: “One of the reasons that private rents have risen so much is that government policy has substantially increased tax payable by private landlords.”
The letter called for the Budget to abolish the three per cent stamp duty levy on homes purchased for rental from among the 250,000 long term empty homes in England, and to keep the local housing allowance pegged to the 30th percentile during this Parliament.
It also urged ministers to consider removing the levy for landlords investing in projects that increase housing supply, such as buying new-build properties ‘off-plan’ or converting empty shops or offices into decent quality rental accommodation.
The groups warned tenants “across the country” were “struggling due to a severe shortage of homes to meet demand”, with property website Zoopla stating there were an average of 21 prospective tenants competing for each private rental property on the market.
While they said Rightmove estimated an additional 120,000 rental properties were needed to achieve a more sustainable annual rent growth of two per cent, based on current demand.
Landlords groups Propertymark, Goodlord and the Large Agents Representation Group (LARG) also signed the letter, which argued that efforts to boost the supply of build-to-rent housing were not a “complete solution to the sector’s challenges”.
A government spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”