Build to Rent Sector Seeks Targeted Tax Breaks and Regulatory Relief: What London Landlords Need to Know
The Association for Rental Living (ARL) is calling on the UK Labour government to introduce tax incentives and ease regulatory burdens specifically for Build To Rent (BTR) developments. John Lewis Partnership’s recent exit from its BTR projects highlights financial challenges in the sector. London landlords with BTR interests should understand these potential policy changes to future-proof investments and ensure compliance.
Why the Build To Rent Sector Is Calling for Change
The Association for Rental Living (ARL), representing investors in Build To Rent (BTR) housing, has called on the UK Labour government to introduce tax breaks and reduce regulatory complexity for BTR developments. This follows John Lewis Partnership’s withdrawal from its BTR commitments, citing financial pressures affecting project viability.
BTR differs from traditional buy-to-let through its scale, design, and management, often comprising purpose-built rental blocks for long-term tenants. The ARL warns that without supportive policy, new rental home delivery may slow, impacting rental affordability and quality.
What This Means for Landlords
London landlords invested in or considering BTR should note evolving policy and market factors influencing financial returns and compliance.
Potential Tax Relief: Multiple Dwellings Relief (MDR)
ARL seeks reinstatement of Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) on BTR acquisitions. MDR can lower SDLT on multiple-dwelling purchases common in BTR. While MDR is currently unavailable for many BTR transactions, its return could improve acquisition economics.
Landlords should monitor government announcements and consult tax advisors to assess potential SDLT savings.
Planning and Licensing: Clarity and Streamlining
ARL advocates for clearer planning classifications for BTR, including mandatory local authority delivery targets. This could expedite approvals and improve predictability.
They also call for rationalising selective licensing regimes across London, which currently vary and can add costs and administrative burdens.
Landlords with BTR properties should review planning permissions and licensing compliance, preparing to adapt if reforms proceed.
Differentiating Landlord Profiles
- Single-Unit Landlords: Less directly affected but should watch broader rental market policies.
- HMO Landlords: Subject to different regulations; can glean insights from BTR advocacy.
- Portfolio Landlords with BTR Assets: Should engage trade bodies and advisors to anticipate tax and planning updates impacting acquisitions and compliance.
- Accidental Landlords: Unlikely involved in BTR but advised to observe rental market trends influenced by BTR supply.
Recommended Next Steps
- Monitor Policy Developments: Track government proposals on BTR taxation and planning.
- Engage with Trade Bodies: Leverage ARL and landlord associations for updates and advocacy.
- Review Investment Plans: Integrate potential tax reliefs and planning changes in financial models.
- Prepare Compliance Teams: Anticipate licensing and planning adjustments to streamline processes.
How Rentals & Sales Can Support You
Our expert team offers portfolio reviews to assess emerging BTR policy impacts. We provide compliance audits for licensing and planning readiness and advise on pricing strategies to maintain market competitiveness.
Contact us to schedule consultations and safeguard your investments amid regulatory changes.
Disclaimer: This article provides information only and is not legal or financial advice. Please consult qualified advisors regarding your individual circumstances.
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