The Residential Landlords’ Association (RLA) is calling on the Chancellor to take action in this year’s Budget to support the army of individuals that make up the bulk of the country’s landlords to provide more homes for rent.
With predictions that one in five households will be in the private rented sector by 2016 and 4.1 million British adults have given up on the idea of ever owning their own home due to the difficulties involved in raising sufficient funds for a deposit, the RLA is arguing that relying on institutional investment will not be enough to secure the homes the country needs.
It says that with nearly 90% of landlords in England being private individuals responsible for 71% of all private rented households, there is a huge potential for them to expand the number of properties available for rent.
To encourage this, the RLA in its Budget submission is calling for measures to enable landlords to more easily develop on small plots of unused public sector landlord that are too small for institutional investors.
It is also proposing reforms to the way the sector is taxed so that renting a property is treated as a trading activity with consequent allowances to promote improved standards and incentives for investment. A specific proposal is for individual landlords to be allowed to pool their developments together to collectively reach the £10 million threshold to qualify for the Government’s housing guarantees scheme.
To provide certainty, the RLA is calling on all political parties to rule out any suggestions of restricting rents through rent controls or index linking rents given the damage that this would do to investment in the private rented sector.
RLA chairman Alan Ward said: “Whilst the private rented sector is the only housing sector to be growing, much more action is needed to boost the supply and quality of homes available to rent and keep rent levels down.
“Our recommendations would help unlock the enormous potential for the army of individuals who rent out property to expand and create more homes and through this they will be feeding more resources back to the Treasury.”