In an unprecedented show of unity from the most influential bodies in business, the consortium wants to see government support for a large scale rented sector mirroring that of America or Europe. It wants a more efficient tax system for investors which could reap major rewards at very little cost to the Exchequer. Major development projects would create thousands of new homes and jobs, securing long term investment in many deprived areas of the country.
With a 10% increase in house prices this year, the outlook for first time buyers remains gloomy. Access to mortgages is constrained and with the average deposit for home first-buyers now £33,000, a cut of 1% stamp duty for cheaper homes is unlikely to make much difference to most people.
With public spending cuts a certainty, meaning less investment in social housing and regeneration, the private rented sector (PRS) is going to be a vital component of Britain’s future housing supply.
In their response to a Treasury consultation, the Property Industry Alliance (PIA) – a collective which includes the British Property Federation, Investment Property Forum, Royal Institute of Chartered Surveyors, British Council of Shopping Centres and British Council of Offices – as well as the Council of Mortgage Lenders (CML) and the Association of Real Estate Funds (AREF), want to see some of the significant barriers to investment overcome.
The organisations admit that not all the tax changes would be neutral, but stress that they would be slight in comparison with other interventions to address housing need and would bring a range of benefits, in terms of:
• addressing housing need
• support for the development industry
• broadening investor choice
• service standards and innovation.