Tax Breaks for Landlords Needed to Avoid Housing Crisis

Despite the latest news that suggests an improvement on the UK housing market, some organisations are still concerned with scarce availability of housing options, especially, when it comes to social housing. LSL Property Services, a British company specialising in residential property services, recently claimed that UK business landlords have to have a tax-break system reintroduced.
According to the LSL Property Services, the current economic crisis is nothing compared to what might come around soon. The level of UK population increases steadily (it is expected to top 70 million by 2031 for several reasons), the availability of residential rental property remains scarce, the UK Government is unable to meet the demand in social housing and to make mortgage financing more affordable, says LSL Property Services.
Those are the reasons for which LSL Property Services believes that the only way out of the coming housing crisis is the reintroduction of BES – Business Expansion Scheme – which was first launched in 1980’s and included tax incentives aimed at the injection of funds into the residential property sector. BES was a success as it helped boost the housing stock by 41% in 18 years (1988-2006). The scheme has not been working in the past 2 years, which resulted in a significantly lower level of property construction. The number of houses built to June 2009 (87,190) barely constitutes 30% of the Government’s target of 240,000. If the current trend continues and population forecasts come true, an average of 4.2 million of Brits will be short of houses by 2031.
In the opinion of Mr. David Brown, LSL Property Services commercial director, reintroduction of BES will help eliminate all the problems as it will not only support housing construction, but will also provide those unable to get property financing, with affordable social housing options.