Imposing further tax rises on the rental market would critically damage the government’s ambitions for economic growth and social mobility.
That’s the warning just weeks before the Chancellor delivers a pivotal Budget.
It comes from the National Residential Landlords Association (NRLA) which wants the government to recognise that the private rented sector is a vital driver of economic opportunity. With around 11m renters in England alone, the sector provides the flexibility and mobility they need to access education, training, and jobs across the country.
A report for the NRLA by former Treasury official, Chris Walker, finds that renters typically live closer to town and city centres, as well as their workplaces, than homeowners.
This research reveals that 45% of private renters live within 5km of where they work, compared with just 29% of owner-occupiers. The report concludes that the sector plays a vital role in “supporting opportunity, career progression and productivity.”
This assessment is shared by the Nationwide Building Society’s specialist buy-to-let lender which notes how the sector has “an important role to play in economic growth by supporting labour mobility.”
Analysis by the NRLA has also found the sector is more likely than the social rented sector to give aspiring first-time buyers the platform from which to buy their first home. Government figures show that 25% of new owner-occupiers have previously rented privately, compared to just 1% who have moved into homeownership from social housing.
Alongside these research findings, figures published by accountancy firm PwC reveal how small and medium-sized landlords support almost 400,000 jobs across the UK. Likewise, research produced by Aldermore Bank shows how landlords spend an average of £6,000 a year on local services, with nearly four in five using local tradespeople to maintain or improve their properties.
In light of this importance, the shortage of homes for private rent to meet demand is hindering growth and productivity. The leading property portal, Zoopla, reports that the number of homes available to rent is down by 10% compared to 2019, whilst tenant demand has risen by 23% over the same period.
The former head of the Institute for Fiscal Studies, Paul Johnson, who recently spoke to the NRLA’s ‘Listen up Landlords’ podcast, has warned that higher taxes would lead to fewer homes to rent and higher rents for tenants.
NRLA chief executive Ben Beadle comments: “The private rented sector is a significant driver of labour and social mobility. It enables people to move for work, access higher education, and seize new opportunities – everything the Government wants to promote as part of its growth agenda.
“Instead, landlords are facing yet more speculation about tax hikes that would hinder investment, reduce supply, and ultimately drive-up rents.
“The Chancellor must use this critical Budget to back responsible landlords who provide good homes and support local economies. That means using the tax system to encourage long-term investment, as opposed to prioritising short-term revenue grabs.”
This article is taken from Landlord Today