That’s according to industry body Propertymark, which said that the measure would likely cost around £1bn in its representation to the government ahead of the Budget.
It argued that landlords are leaving the market in part because of the removal of the ability to claim the relief against interest payments on their buy-to-let mortgages. This, Propertymark suggested, is resulting in an even greater imbalance between supply and demand for rental properties.
It pointed to its own research, which found that more than half of the buy-to-let properties sold in March of last year had left the private rented sector entirely, while there was a drop of 49 per cent in properties available to rent per letting agent branch between March 2019 and March 2022.
In its submission, Propertymark stated that while the decision to withdraw the relief in 2016 may have been correct, “the economic climate is remarkably different in the present day with record high interest rates”.
The trade body noted that restoring the relief would also help the government to reduce the amount being spent each year on housing benefits, as a result of the lower rents.
Repel section 24 to incentivise landlords
Timothy Douglas, head of policy and campaigns at Propertymark, said: “The industry can also make a significant contribution to increasing supply to meet the demand in the private rented sector by incentivising landlords to enter and stay in the market by repelling section 24 with the reintroduction of mortgage interest relief.”
The submission also calls for the government to improve the welfare system for vulnerable and low-waged tenants, for example through the removal of the shared accommodation rate, which places a cap on the amount of housing assistance which can be provided through the benefits system.
In addition, the submission called for more support for landlords looking to decarbonise their properties, calling for lessons to be learned from the Green Homes Grant which Propertymark argued had been “hampered by bureaucracy and inefficient management”.
