Housing supply

Government ‘landlord bashing’ is fueling rental housing supply crisis, NRLA warns

Landlords have warned ministers that their ongoing attempts to curb investment in the private rental sector are fueling a supply crisis, driving up rents and making home ownership harder to afford.

The National Residential Landlords Association (NRLA) says that since 2015 this has included taxing the supply of new homes for rent through a three per cent stamp duty, limiting mortgage interest relief to the base rate income tax so that, unlike any other business, owners are taxed on turnover rather than profits.

The NRLA warns that these tax measures are fueling a supply crisis in the sector.

“Ministers have been repeatedly warned of the damage that will be done if they continue to attack the private rental sector,” says NLA general manager Ben Beadle (pictured).

“The supply crisis is completely counterproductive to the government’s mission to turn tenants into owners.

“By removing supply as demand increases, resulting in higher rents, they continue to make it harder for tenants to save for their own homes.

Wake up

“The Chancellor must wake up to a government-induced crisis, scrap the tax on new rental properties and review other measures that increase landlord costs.”

According to recent data from research consultancy BVA/BDRC for the NRLA, 62% of private owners in England and Wales are reporting increased demand for tenants in the first quarter of 2022 – a record high.

Read a complete guide to tax for landlords.

In the same quarter, more homeowners (11%) sold properties than bought new ones (8%), making the supply crisis even more acute.

This has a predictable effect on rents. Official data shows private rents across the UK rose 2.4% in the first quarter of 2022, the biggest jump since 2016.