The Royal Institution of Chartered Surveyors (RICS) has called on the government to focus on a build to rent initiative and scrap the 3% stamp duty surcharge on second homes.
Research by the RICS has found that an extra 1.8 million rental properties will be required to satisfy UK demand by 2025, but currently 86 per cent of landlords do not intend to increase their rental property portfolios in 2016 due to the new tax measures.
They have suggested that pension funds be incentivised with tax breaks to finance large scale rental property schemes which could be built on brownfield land sites currently held by local authorities.
RICS head of policy, Jeremy Blackburn, said: ‘We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.
‘The private rented sector became a scapegoat under the previous Prime Minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.
‘We must ensure that it is fit for purpose, and the government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.’
Helen Gordon, chief executive of residential property owner Grainger agreed, and said that they planned to invest over £1billion by 2020 in ‘high quality, long term rental housing’, and called on the government to help.
She said: ‘In order to support us in this ambition and many others with similar plans, the Government should recognise the important role we have to play and explicitly support build-to-rent in its policies.’
She added: ‘Importantly, the government could ensure the planning system and regulatory red-tape does not hold back investment, and it should ensure that it does not inadvertently penalise large scale investors through tax measures such as the SDLT 3% surcharge on second homes, which discourages large scale, institutional support for new rental homes in the UK.’