The Government should help landlords meet the demand for residential property in London and across the UK by reforming the current tax system, says high-profile housing expert Julie Rugg.

After completing her report, commissioned by the previous Government, she concludes the current system needs to stop viewing the residential property sector as a method of private investment. Instead it should recognise the residential property sector as a business, unlocking the tax advantages that go with it.

“Government policies need to regard landlords as active business people rather than passive investors,” she said.

The Residential Landlords Association (RLA) is calling on Chancellor George Osborne to issue a series of tax measures designed to boost the private rented sector. The RLA represents over 15,000 private sector residential property landlords in England and Wales and has released a statement, saying:

“With a taxation system that fails to recognise the sector as a business, there is little incentive for existing landlords to invest in new properties or for new landlords to enter the market.”

Housing charity Shelter has just released a report showing supply is failing to meet demand with up to 5 people chasing each property coming onto the rental market.The RLA cite these figures as evidence of “the difficulties being faced by many for whom the private rented sector is their best hope of finding accommodation.”

Further evidence of the heightened demand for residential property in London is found in new research, showing a 12.2% increase in rents over the past year. The average month’s rent is now a reported £1202, while average tenancy length dropped from 27 months to 22. This is something that raises some concerns about rental properties in Central and North London and is something that we, at The Islington Company are seeking to address.

The RLA will now wait for the Chancellor to deliver his autumn statement, in which he is expected to announce the Government’s plans for stimulating the UK economy. Will that include measures to help landlords create more residential property supply? Watch this space…