The Royal Institution of Chartered Surveyors has urged the government to focus on a pioneering build-to-rent sector and abandon the 3% stamp duty surcharge.
RICS, a professional body for qualifications and standards, wants pension funds to be incentivised with tax breaks to build affordable large scale rental properties. It also wants local authorities holding brownfields sites to be encouraged to release land for such properties.
In the short-term it feels the stamp duty surcharge, introduced in April, will harm renters by restricting supply in the short-term.
RICS data shows that the UK needs to provide an extra 1.8 million rental homes by 2025 to meet demand.
However as it stands the majority (86%) of landlords have no plans to increase their rental portfolios this year.
Jeremy Blackburn, RICS head of policy, 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 Grainger, the UK’s largest residential property owner and manager listed on the London Stock exchange, gave a point-by-point take on why built-to-rent is the solution.
She said: “Build-to-rent can help the government in five simple ways: (1) by increasing housing supply; (2) by delivering more quickly than other traditional house-building models; (3) through creating new jobs and contributing to town centre regeneration; (4) by providing a better deal to customers including more stability; and (5) by supporting greater flexibility in the labour market.
“We have an ambitious plan to invest over £1bn by 2020 in high quality, long-term rental housing.
“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.
“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.”
RICS is calling for housing minister Gavin Barwell to adopt the existing voluntary private rented sector code to regulate the build-to-rent and buy-to-let sectors to protect the most vulnerable renters.