Industry News Sally Walmsley 10/03/2023

Budget 2023: NRLA calls for full PRS tax review

The NRLA has called for a full review of how private rented housing is taxed ahead of next week’s budget, after 30% of landlords said they were planning to sell homes.

Chancellor Jeremy Hunt will deliver the budget next Wednesday, March 15, his second as chancellor.

The NRLA has made the call in a submission to Government, backed up by data from research consultancy BVA-BDRC for the NRLA, showing a third of landlords are planning to sell - at the same time that 65 per cent are seeing demand increase.

As part of its call to action, the NRLA has encouraged Jeremy Hunt and the Treasury to analyse the combined impact of all recent tax changes on the supply of homes to rent.

These include the restriction of mortgage interest relief, the three per cent stamp duty levy on the purchase of homes to rent out and, in the Autumn Statement last year, an effective hike in Capital Gains Tax.

The association instead wants pro-growth tax measures to encourage landlords to remain in the sector and grow their portfolios.

Other proposals outlined in the submission include calls for:

  • a sustained programme of support for landlords and homeowners, to help them make vital energy efficiency improvements to meet Net Zero targets.
  • the reversal of the freeze on Local Housing Allowances (LHA) rates, which should be re-aligned to at least the 30th percentile of comparable local rents, with a Government commitment to maintaining rates at market rents
  • A full assessment of tenant support options including Discretionary Housing Payments (DHP) to ensure that those affected by the cost-of-living crisis haver the help they need.

The NRLA believes the Autumn Statement 2022 was a missed opportunity to remove barriers to the supply of housing. It is now urging the Government to consider the full benefits that investment in housing can bring to drive growth and support its Levelling Up agenda.

NRLA chief executive Ben Beadle said: “From students queuing to view properties, through to benefit claimants who struggle to access homes they can afford, the impact of the supply crisis in the rental market is stark.

“The harsh truth is that the Government’s efforts to discourage investment in the sector are working. But punitive taxation alongside record demand for rented housing is a disastrous combination that serves only to hurt renters – it is time to change tack.

“The Treasury needs to undertake a comprehensive review of the taxation of the rental market abd introduce pro-growth measures to support renters to access the homes they need.”

Keep an eye on our news site and social media channels for news and reaction following the budget announcement.