Big rental stock boost if buy to let stamp duty levy ditched
A move to drop the 3% stamp duty surcharge on buy to let properties would actually boost revenue to the Treasury by as much as £10bn over the next decade.
Despite the Treasury losing out on stamp duty receipts, this would be more than outweighed by increased earnings from income tax and corporation tax paid by landlords, according to analysis by economic consultancy, Capital Economics which was commissioned by the National Residential Landlords Association (NRLA).
The landlord trade body warned that there is currently a “chronic shortage” of homes to let, a situation which only looks set to get worse. The research suggested that at the current rate, almost 230,000 new homes would be needed in the housing sector each and every year if the government’s ambitions for housing ‒ across both home ownership and the rental sector ‒ are to be met.
What’s more, the study cautioned that even if other housing tenures double their current rate of growth, it would still mean more than 100,000 new private rental homes a year would be needed, given the forecast growth in the numbers of young people.
The report stated that without changes in tax and other policy areas, the rental stock will continue to decline, by as much as half a million properties over the next decade.
Recent research from Zoopla found that tenants are paying an extra £62 a month in rent as a result of the sharp drop in rental stock, with the number of available rental properties falling 39% compared to the five-year average.
Ben Beadle, chief executive of the NRLA, called on the government to “wake up to a crisis of its own making”, accusing the authorities of “taxing landlords out of the market”.
This, he argued, had only led to a reduced level of supply, higher rents, and a more expensive route to home ownership.
He said: “The evidence clearly shows that the supply of rented housing is declining as demand increases and will continue to do so. The Government is taking a blinkered approach to the issue, which is not helped by its reluctance to admit mistakes it has made in the past.
“It makes no sense to tax the supply of new homes supplied by landlords investing in new build or bringing empty homes back into use. As this study indicates, removing the tax will actually generate more revenue, not less.”