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Places for People subsidiary joins calls for Treasury rethink on scrapping of property tax relief
Build-to-rent (BTR) developers – including a Places for People subsidiary – have urged Jeremy Hunt to reconsider a property tax change announced in his spring Budget, as they argue it will mean fewer new homes being built.
In a letter to the chancellor of the exchequer, the companies said the plan to abolish multiple dwellings relief completely will lead to “unintended consequences”.
At present, the relief means firms can pay less stamp duty when buying more than one dwelling in a single deal.
In his Budget last month, Mr Hunt said the relief will be scrapped from June this year as there was “no evidence” it was promoting investment in the private rented sector.
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However, the groups claim in the letter that this will “result in fewer new homes being built and a drop in both domestic and overseas investment into UK housing delivery”.
They said the change will increase the tax burden on building new rental homes, which will hurt the viability of schemes.
A “conservative estimate”, according to the groups, would be between 13,000 and 25,000 homes not getting built.
They added: “It will impact developments in areas with lower property values disproportionately.”
Among the signatories to the letter are Places for People’s fund manager Thriving Investments, Grainger, Get Living and Quintain.
Picture Living, one of Thriving Investments’ funds, invests in single-family homes for private rent and is a joint venture between Places for People and the Universities Superannuation Scheme, the pension fund.
BTR has been a fast-growing sector in recent years. However, analysis published last summer found that despite there being a pipeline of 250,000 BTR homes, “challenging” market conditions had slowed output sharply.
The groups, led by the British Property Federation, also argued that it will “disproportionately affect” the availability of “lower-value” affordable rental housing in London and the South East of England.
As a result, there will also be a smaller proportion of Section 106 properties available on schemes, the firms claimed.
They said multiple dwellings relief should be kept for “large-scale residential property acquisitions” typical of BTR and purpose-built student accommodation.
“We would be delighted to work with you and your officials on what this retention might look like in practice,” the letter concluded.
The Treasury has been contacted for comment.
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