´Vital´ need for the growth of the private rented sector

In an interview with Ruban Selvanayagam of PS Investor Services, Patrick Clift – spokesman from the BPF, also stated its intention to encourage further institutional investment in the private sector.  The organisation is currently in dialogue with the department for Communities and Local Government, the Treasury and the Homes and Communities Agency and, earlier this year, produced a joint consultation response with the Council of Mortgage Lenders and the Association of Real Estate Funds into a Treasury consultation into increasing investment.
 
Mr Clift also stated his disappointment with regards to the organisations unsuccessful government lobbying for tax incentives for the UK property industry: "the BPF has long argued that a simple and relatively cheap tax incentive would be to disaggregate stamp duty land tax on the bulk purchase of homes. At present, an investor has to pay SDLT on the total cost of a portfolio, as much as 5%, even if the homes would only have been charged at 1% if bought individually."
 
Questioned on Local Housing Allowance (LHA) reforms, Mr Clift commented: "the government seems to assume that all claimants are long-term and need incentives to return to work, when in fact many have lost their jobs recently as a result of the last recession. By contrast, we would argue that the welfare system should seek to support a person remaining in their home in the early stages of unemployment because that will greatly assist their ability to quickly find another job. A major issue will be linking housing benefit rises to CPI, rather RPI at present. Over the past decade rents have risen at about 4.5% per annum. CPI on the other hand, is the explicit focus of the Bank of England Monetary Policy Committee, which has a target to maintain it at 2% per annum.  This will have a devastating effect. The mismatch between 2 and 4.5% will be that the pool of property notionally available to claimants will be constantly being eroded by the diminishing purchasing power of their benefit.  The Chartered Institute of Housing analysed the long term effect of this change for different property sizes. They conclude that in some areas, within two years of the change coming into effect, it is projected that no properties will be available that can be fully paid for with LHA.  The consequences are stark. Either that household will build up rent arrears which consequently might lead to eviction, or they must cut back on income intended for other necessities."
 
The organsation asserted that they will continue to lobby for the private rented sector as well as continuing to work with government to create a “local” planning system that works in addition to promoting ways in which central and local government can use public sector assets as a catalyst for regeneration and renewal. 

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