The National Residential Landlords’ Association (NRLA) has called on the government to begin a full review of how private rented housing is taxed.
In its submission to the Treasury prior to next month’s Budget, the organisation is calling for a full review of taxes which impact the sector — including the capital gains tax change announced in the autumn statement last year.
As part of this call to action, NRLA encourages the Treasury to analyse the combined impact of all recent tax changes on the supply of homes to rent.
This follows NRLA’s latest research — compiled by BVA-BDRC — which revealed that 65% of landlords believe demand for private rented housing has increased across England and Wales in Q4 2022.
Despite the strong demand, 30% of respondents said they plan to cut the number of properties they rent in 2023 — the highest level of planned disinvestment seen in more than six years, according to the research.
Just 9% say they plan to increase the number of properties they rent out over the next 12 months.
Ben Beadle, chief Executive at NRLA, said: “From students queuing to view properties, through to benefit claimants who struggle to access homes they can afford, the impact of the supply crisis in the rental market is stark.
“The harsh truth is that the government’s efforts to discourage investment in the sector are working, but punitive taxation, alongside record demand for rented housing is a disastrous combination that serves only to hurt renters.
“The supply crisis we see is entirely government-made and the policies of successive chancellors have backfired spectacularly — it is time to change tack.
“The Treasury needs to undertake a comprehensive review of the taxation of the rental market. This needs to assess the impact recent tax hikes, including changes to mortgage interest relief and stamp duty, are having on supply.
“We then need pro-growth measures to support renters to access the homes they need.”
