Government Urged to Support Build-to-Rent Sector Amid Financial Challenges: What London Landlords Need to Know

What’s Happened?

The Association for Rental Living (ARL), a key industry body promoting Build-to-Rent (BTR), recently issued an open letter urging the UK government to provide stronger support to the sector. This follows John Lewis Partnership’s withdrawal from BTR investment, highlighting growing financial viability concerns within the industry.

The ARL’s letter calls for three main interventions:

• Policy stability to give investors confidence
• Planning reforms to streamline and encourage BTR developments
• Tax adjustments, including the possible reinstatement of Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT), to reduce acquisition costs

These measures aim to maintain momentum in delivering new rental homes and avoid slower housing supply and worsening affordability.

Why This Matters to Private Landlords in London

While there are currently no new legal obligations for landlords or letting agents, potential policy changes could have notable effects:

• Planning policies: Local authorities might introduce BTR housing targets or selective licensing conditions tailored to BTR schemes, influencing local rental markets.

• Tax landscape: Reinstating MDR for SDLT could lower acquisition costs for institutional investors, potentially increasing competition for property purchases.

• Market supply and rents: Slower BTR delivery due to financial uncertainty might reduce the growth of purpose-built rental stock, putting pressure on existing private rental supply and rents.

Implications for Different Landlord Profiles

• Single-unit landlords: Less direct impact but should monitor local planning policies affecting neighbourhood dynamics or licensing.

• HMO landlords: Changes in selective licensing regimes linked to BTR targets could influence compliance requirements.

• Portfolio landlords and investors: May face increased competition or opportunities depending on tax changes and government support.

• Accidental landlords: Should monitor market shifts affecting property values and rental demand.

Practical Next Steps

1. Monitor Government and Local Authority Announcements: Stay updated on responses to ARL’s letter and local planning consultations regarding BTR integration.

2. Review Acquisition Strategies: For landlords considering portfolio growth, assess potential impacts of MDR reinstatement on SDLT liabilities.

3. Engage with Industry Bodies: Join or follow groups like ARL for timely updates and advocacy insights.

4. Advise Tenants and Clients: Prepare tenants and clients for evolving regulatory environments if managing or advising on BTR properties.

5. Plan for Compliance: Stay ahead of potential selective licensing changes by reviewing current compliance workflows.

How Rentals & Sales Can Support You

Our team offers tailored services to help London landlords navigate evolving conditions, including:

• Portfolio reviews to identify risks and opportunities amid sector shifts
• Compliance audits ensuring readiness for potential licensing or planning changes
• Pricing strategies aligning with changing supply and demand dynamics

Contact us for a consultation to future-proof your rental business.

Disclaimer: This article does not constitute legal advice. Landlords should consult qualified professionals for specific compliance or tax guidance.