The British Property Federation has urged the Chancellor to use the Spring Statement to restore Multiple Dwellings Relief, arguing the tax change would unlock thousands of delayed rental homes while boosting Treasury revenues. MDR, a bulk purchase relief within Stamp Duty Land Tax, was abolished in 2024. The BPF estimates its removal has stalled or undermined the delivery of up to 25,000 build-to-rent homes by making schemes financially unviable.
Construction activity drops sharply
The impact has been stark across the sector. New London starts dropped to just 613 homes in 2025, down 80 percent on the previous year. Regional markets fared slightly better but still saw starts fall 37 percent, from 12,781 to 8,063, according to figures from the BPF and Savills. The federation expects these pressures to continue into 2026, creating further risks for the government’s housing delivery targets unless policy intervention improves development economics. The removal of MDR also reduced the value of build-to-rent portfolios by an estimated £4bn, limiting the sector’s ability to invest in new schemes.
BPF puts forward cost-benefit case
According to BPF estimates, introducing a more targeted version of MDR for the build-to-rent sector would cost the government about £155m. If that policy change unlocked the 25,000 affected homes, the resulting construction activity could generate around £650m in wider tax revenues. Melanie Leech, chief executive of the British Property Federation, said: “The tax system is undermining the viability of much-needed new homes in London and across the country. An extremely cost-effective way of unlocking viability and enabling stalled housing to proceed to construction would be through the reinstatement of targeted MDR.” Leech added: “Given the combination of fiscal pressures and low housing numbers the government is facing, this is a simple lever to pull that would help address the viability crisis and increase Treasury returns. We urge the Chancellor to act now rather than delay until the Autumn, when the housing delivery numbers will be as stark for 2026 as they have been for 2025.” This follows LK’s report last week on John Lewis exiting the build-to-rent sector, which highlighted growing viability concerns across institutional rental development. The latest BPF figures suggest those pressures are now translating into measurable construction declines. The call also comes days after industry bodies urged broader housing tax reforms ahead of the Spring Statement, with stamp duty changes among the key asks.
What this means for landlords
- If you’re watching the rental supply pipeline: Fewer build-to-rent completions mean tighter supply in urban markets, particularly London, potentially supporting rental growth.
- If you’re a portfolio landlord using SPVs: MDR abolition increased acquisition costs for bulk purchases - reinstatement would reduce transaction costs on multi-unit deals.
- Watch for: The Spring Statement on 26 March - any MDR-related announcements would signal government willingness to use tax levers for housing supply.
- Institutional competition: A struggling BtR sector means less institutional competition for tenants in some markets, but also less new stock overall.
- Bottom line: The £4bn portfolio value hit shows how tax changes can reshape sector economics - individual landlords should factor policy risk into expansion plans.
Editor’s view
The numbers are hard to argue with. If £155m in tax relief genuinely unlocks £650m in construction-related revenues - plus the social benefit of 25,000 homes - it looks like straightforward maths. Whether the Treasury sees it that way is another matter. Chancellors rarely reverse course within two years of a policy change, but the housing delivery crisis may force the issue.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 2 March 2026
Sources: British Property Federation, Savills
Related reading: John Lewis exits Build to Rent as industry calls for tax relief
