Rent increases prove need for housing growth boost

With an average of five people looking to rent each available private rented property, the supply of accommodation in the sector is clearly failing to meet the demand.

One of the reasons why the market is not working to encourage more investment into the sector is because of the taxation system that fails to recognise it as a business and continues to treat it as a private investment.

In her review of the private rented sector commissioned by the previous Labour Government, Julie Rugg concluded that:

“Government policies need to regard landlords as active business people rather than passive investors. Policies should be developed to 'grow' the business of letting.”

The RLA is calling for a package of revenue neutral tax measures in the Chancellor's autumn statement which would make a major contribution to boosting the supply of properties to meet ever increasing demand whilst also providing a boost to the economy.

It is only by encouraging such growth that rents can be prevented from spiralling out of control, causing anguish for those in need of accommodation in the sector.

The RLA's Chairman, Alan Ward commented:

“Today's figures on rental levels outline the difficulties being faced by many for whom the private rented sector is their best hope of finding accommodation.

“With a taxation system that fails to recognise the sector as a business, there is little incentive for existing landlords to invest in new properties  or for new landlords to enter the market.

“I hope that amongst the measures the Chancellor will be announcing in the autumn statement to boost growth, he will change the tax treatment of the private rented sector to allow it to grow and create more supply and so stimulate revenue and employment in the refurbishment and building sectors.”