Government refusal to invest in private rental sector angers BPF
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The British Property Federation says the government has missed “a real opportunity” to support the private rented sector after it ruled out giving financial support to increase renting.
The BPF says a financial backing for the sector would ease the UK’s housing crisis, create new jobs and reduce the budget deficit.
The Treasury responded to a consultation launched by the previous government, ‘Investment in the Private Rented Sector’, intended to unlock new sources of capital for house building in the face of constrained bank lending and falling public spending.
But despite calls from an alliance of industry bodies, the Treasury ruled out giving financial support to increase the delivery of homes to rent, claiming that institutional investment would remain a ‘niche’ part of the PRS.
The BPF had argued for cost effective measures to encourage institutions such as pension funds to invest in homes for rent, including the disaggregation of Stamp Duty Land Tax on the bulk purchase of homes.
Ian Fletcher, director of policy on real estate at the BPF, says the real losers are millions of people in the UK who just want somewhere to live.
He says: “There is a huge hole in the Treasury’s logic - on the one hand arguing that any change to the SDLT regime would ‘carry a significant cost to the Exchequer’, but on the other hand that this is a ‘niche’ sector and that nothing would happen. They can’t argue it both ways!
“The good news is that private renting will have no shortage of demand, as people struggle to buy and the government struggles to fund other housing provision. The bad news is that with a little bit of public spending government could have leveraged in significant funding for housing from institutions.
“It is difficult to see what other sources of funding the government is going to conjure up in the near future.”
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