Government policies 'could harm buy to let industry'

19 July 2010

Written by David Whittaker

As the supply of rental housing hits a record low, one organisation has claimed that the chancellor did little to encourage those in the buy to let industry to invest.

The Association of Residential Lettings Agents (ARLA) recently released the results of its second quarter Review and Index, which showed that 70 per cent of the body's member offices had noted a greater number of tenants than properties on the market.

This constitutes a 59 per cent rise compared with the first three months of 2010 and a 24 per cent year-on-year increase, the organisation stated.

Operations manager at ARLA Ian Potter commented that the government has done little to offer incentives for people to invest in the private rented sector, with a hike in capital gains tax possibly discouraging those who may have otherwise entered the industry.

In addition to weak construction levels and a limit imposed on housing benefits, the recovery of the housing market could be harmed, he said.

"Instead of the housing market getting back on its feet, what we may soon see is people going without homes they can afford - something that simply should not be allowed to happen," Mr Potter noted.

However, the expert recently announced - in a separate statement - that the rise of capital gains tax from 18 per cent to 28 per cent, may not damage the buy to let sector as much as had been anticipated.

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