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The rental sector is increasingly seen as key to future housing strategy as production of new homes is out of line with consumer demand and as such it needs more help from the Government, according to the Association of Residential Letting Agents.

ARLA's most recent survey of the private rented sector noted that the balance of supply and demand in UK housing is already climbing towards pre-recession rates – it says central London has seen particular bounce-back as the number of tenants looking for property begins to outstrip the number of properties available – with 19% of ARLA members reporting more tenants than properties, compared with 6.9% six months previously.

Ian Potter, operations director of ARLA, says: "The reality of the UK housing market is that the private rented sector shoulders the burden of the lack of housing supply both now and in the future. What is also manifestly apparent is that landlords need governmental assistance in ensuring that stock is of the quality that modern housing standards demand."

To do this, ARLA says the Chancellor must look to removing VAT on the purchase of materials and labour for capital expenditure to improve older property brought into the rental market. He should also introduce capital allowances for landlords improving housing stock over a certain age and should also continue a stamp duty ‘clawback' to purchasers of older properties where a survey report and an Energy Performance Certificate show a property is likely to benefit from capital investment.

Potter says: "If the private rented sector is going to continue to support the nation's housing demands and improve the quality of its stock, the Chancellor must recognise the need to support the UK's private landlords. Landlords, in general, are not treated as businesses within the fiscal regime. This is a real disincentive to producing well managed, well maintained, property for certain parts of the market."

SOURCE: ARLA, 28/11/09

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