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With a shortage of homes to rent, PropertyMark is calling on the next government to rethink how landlords are taxed to encourage new investment in the rental housing sector.
While demand for private rented housing continues to grow, the latest data from Rightmove reveals an alarming fall in the number of properties available to rent as more tenants choose to renew their existing leases rather than move, further widening the imbalance between supply and demand for the PRS.
Nathan Emerson, CEO of Propertymark, said: “Propertymark has long maintained that the private rented sector needs more housing to stabilise rental prices, but there are myriad other factors that can contribute to making the market more attractive to both investors and tenants.”
Changes to tax relief for owners of rented property over the past few years have led to a sharp decline in net rental income, causing many investors to pull back from the private rented sector, but it is private renters who have suffered the real losses.
With many landlords’ profits disappearing, the majority who continued to invest in the private rented sector have little choice but to make up for their losses through high rents, with tenants paying the price in government tax levies.
Emerson added: “With a general election due to be held this week, Propertymark hopes the next government will reform the tax system to encourage more investors to invest in the private rented sector, lowering rents for tenants in the long term.”
“We support increasing housing supply, but there must be a workable, sensible programme that respects protecting the Green Belt wherever possible. It would also be wise to avoid rent controls, which have had a devastating effect on Scotland’s private rented sector.”
Analysis shows 120,000 rental homes needed; rents hit record high