Tax changes over recent years have discouraged landlords from making further investment in the private rented sector, the National Residential Landlords Association has found.
More than half of the 1,400 respondents to a survey conducted for the NRLA by the London School of Economics said this was the case.
Tax changes singled out included restrictions to mortgage interest relief, a three per cent stamp duty levy on the purchase of additional homes, and a decision to cut Capital Gains Tax to 18 per cent for chargeable gains on everything other than the sale of residential property.
A third of respondents said restriction of mortgage interest relief was the tax change having the greatest effect on their rental business. Of this group, 39 per cent said the change meant they were not proceeding with planned future purchases. Some 31 per cent said they had put plans on hold, while 28 per cent said they were taking steps to leave the sector altogether.
Just over a quarter of landlords (27 per cent) said the stamp duty increase had been significant, while almost as many (26 per cent) said changes in the tax treatment of furniture and fittings were important to them.
‘It is clear that recent tax increases have deterred investment in the sector’, said NRLA chief executive Ben Beadle.
‘With the demand for homes to rent outstripping supply this will only hurt tenants as they face less choice, higher rents and find it more difficult to save for a home of their own as a result’.
