The British Property Foundation wants the Government to boost the build-to-rent sector to finally get a hold of the country’s housing crisis.
A major trade association, the British Property Foundation (BPF), shared their views to change rules surrounding stamp duty, planning rules and build-to-rent in a submission with the Treasury ahead of Chancellor Philip Hammond’s autumn statement, his first since replacing former Chancellor Osborne.
The new stamp duty rules came into effect on April 1 earlier this year and require property investors to pay an extra 3% surcharge when purchasing a property. This decision was intended to help first-time buyers to make their first steps onto the property ladder, BPF however said that this “sent out a negative message to almost £50bn of investment capital that is interested in build-to-rent opportunities in the UK”.
“While we understand the rationale behind its application to all owners of multiple homes, there is a strong argument that exempting investors that contribute towards the delivery of new homes would have a positive impact on that delivery,” said the BPF’s submission.
“If the government would like to retain some form of charge on owners of multiple homes, we would encourage it to be more targeted in its approach. For example, a capital gains tax surcharge on second homes which are not rented out may be a more appropriate option.
“Such a measure would not have an adverse impact on professional investors and importantly, the supply of new homes. Furthermore, it would act as an incentive to second home owners to rent their additional homes, thus increasing supply.”
On top of that, the BPF suggested planned cuts to tax relief for landlords as well as a “clearer national planning policy for build-to-rent”.
The BPF recently released figures to underline their requests that state a 214% increase in build-to-rent units under construction in the last 12 months (now at 22,293 units). When it comes to build-to-rent units with planning commission the jump was even bigger with 230% to 35,121 units in total.
“The build to rent sector has been one of the good news stories of the housing market over the past few years and it is great to see quality rental homes now coming on to the market at scale,” said Melanie Leech, chief executive of the BPF.
“The truth is the sector could be delivering so much more, however, if it can find the opportunities and maintain confidence to invest. The Brexit negotiation period provides a window of opportunity to channel even further investment into this form of housing supply.
The sector was kick started a few years ago with support from government and further modest planning and SDLT changes we believe could firmly send it into overdrive.”