The government should do more to stimulate residential investment

COMMENT Renting will be such an important part of the housing market and economy as we recover from the pandemic. The stamp duty holiday extension and launch of the mortgage guarantee scheme in last week’s Budget provide stimulants for house buyers, but it is disappointing that the rental sector is so often overlooked and still deemed as second choice by some. In particular, there are opportunities for levelling the playing field for major build-to-rent investors in tax treatment, including SDLT and VAT reliefs on construction, both of which would help stimulate housing supply rather than just housing demand. We are in the midst of a housing crisis and, for many, buying isn’t an option right now; either due to lifestyle choice or financial reach. And we know that more people rent during economically uncertain times. Build-to-rent can play a vital role in providing high-quality homes at pace in the locations that need them the most. The 130% super deduction capital allowance is a bold move to kick-start much-needed investment in the UK. At the time of writing this, it’s unclear how real estate investment will be treated, but clearly its potential inclusion will be a significant boost to property investment, particularly if given the opportunity to be used for sustainability upgrade and greening of buildings. It could also potentially help to deliver more homes, particularly build-to-rent, which are investment assets rather than trading assets and support the recovery of the high street and our city centres which this country’s desperately needs post-pandemic. With the existing Green Homes Grant scheme failing to deliver in line with previous expectations, I would echo the view of the BPF that the chancellor has missed an opportunity by ignoring calls to zero rate VAT on repairs and maintenance of residential buildings, which is currently set at 20%. This could have made a genuine difference in supporting the improvement of health and safety standards in our homes, while also positively improving energy efficiency standards. The UK housing stock is one of its core infrastructures and we have an opportunity to invest in this sector to ensure we continue to improve housing provision. This was always likely to be a challenging budget, given the need to maintain economic momentum as we exit lockdown, while reassuring markets that the government is serious about maintaining budgetary discipline. The economic support provided to maintain employment levels and grow activity is obviously a strong positive for our business, but there is a tinge of disappointment that the government could have done more to stimulate residential investment, considering the quality, quantity, energy efficiency and variety of new homes that we need for our post-Covid economic recovery. Helen Gordon is chief executive at Grainger