In a bid to tackle the housing crisis, the National Residential Landlords Association (NRLA) has proposed that increasing the supply of homes for private rent could contribute a significant £10 billion to government finances. The association submitted its proposals to the government ahead of the Budget on March 6.
According to research findings, there is a growing demand for rental properties, with an average of 11 prospective tenants enquiring about each available property. Independent analysis conducted by Capital Economics indicates that scrapping the three per cent stamp duty levy on additional home purchases could result in the availability of almost 900,000 new private rented homes across the UK.
Capital Economics’ modelling suggests that the elimination of the stamp duty levy would not only meet the demand for rental properties but also lead to increased income and corporation tax receipts. This, in turn, could result in a substantial £10 billion boost to Treasury revenue over the same period—a figure comparable to the entire £11.5 billion Affordable Homes Programme budget for 2021-26.
The three per cent stamp duty levy was introduced in 2016 by then-Chancellor George Osborne, who argued that it would prevent landlords from displacing families aspiring to become homeowners. However, the NRLA challenges this reasoning, citing the London School of Economics, which argued that “nationwide only a minority of sales to landlords involved bids from both types of buyer.”
The NRLA is urging the Chancellor to consider scrapping the levy in the upcoming Budget. This call is echoed by Paul Johnson, Director of the Institute for Fiscal Studies, who warned in a piece for The Times that “the more harshly that landlords are taxed, the higher rents will be.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, emphasizes the importance of growing the private rented sector to meet tenant demand and boost Treasury coffers for essential public services. He argues that discouraging investment in much-needed private rented accommodation could lead to more challenges for prospective renters and advocates for swift action by the Chancellor to address the housing crisis.