House Builder Blames New Landlord Taxes for Subdued Growth
Posted on 02/04/2018 by Sulgrave Estates
A major house builder has blamed recent tax increases on private landlords as a reason it is not increasing housebuilding.
Berkeley Group said that a fall in demand by domestic buy-to-let landlords was one of a number of reasons why it would be ‘impossible’ to boost housing supply beyond its current plans.
It cited in particular, the decision to restrict mortgage interest relief to the basic rate of income tax and the 3% stamp duty levy on the purchase of new homes to rent out. It noted the importance of supporting landlords who, it said “buy early in the cycle and provide security of cash flow to enable complex, capital intensive developments to be brought forward.”
This comes at a time when the Office for Budget Responsibility warned of “subdued growth in residential investment”. Recent research by the RLA has found that 70% of landlords who responded to their survey said that the stamp duty levy is putting them off investing in further rental property.
David Smith, Policy Director of the RLA said “We have long warned the Government of the dangers of its tax raid on the private rented sector. Now we see its impact, with investment in new homes slowing and house builders not confident to up their levels of house building. Rather than taxing new homes, it is time for smarter, pro-growth taxation that recognises the rental market as a crucial part of addressing the housing crisis.”