Build-to-Rent Advocates Demand Tax Benefits

The British Property Federation (BPF) is advocating for significant tax reforms aimed at revitalizing the Build-to-Rent (BTR) sector. In a recent submission to HM Treasury, the BPF emphasized the importance of the real estate industry, which contributes £110 billion annually to the UK economy and supports one in every 13 jobs.

The Current Crisis in the Build-to-Rent Sector

The BPF argues that the viability of the real estate market is under threat. Recent data from the S&P Global UK Construction Manager’s Index revealed the most substantial contraction in construction activity in five years. Furthermore, the latest quarterly starts in the BTR sector show a continued decline.

According to the September 2025 Deloitte London Office Crane Survey, new construction activity has decreased for the second consecutive survey period. The situation is particularly dire for BTR, with construction starts in the first half of 2025 dropping to only 2,600 homes, a stark contrast to the 18,000 BTR homes completed in 2024.

Impact on Government Housing Goals

This decline is a significant setback to government ambitions of delivering 1.5 million homes during the parliamentary term and advancing the development of New Towns. The BPF has outlined a series of tax-related requests to the Chancellor ahead of the upcoming Budget.

• Reinstate Stamp Duty Land Tax (SDLT) for High-Density Housing: The BPF requests the reinstatement of SDLT support depleted by the abolition of Multiple Dwellings Relief (MDR) in 2024, which they estimate has obstructed up to 25,000 BTR homes.
• Extend Empty Property Business Rates Relief: The BPF proposes extending the current empty property business rates relief period from three to twelve months to promote faster occupancy of commercial spaces.
• Remove Council Tax on New BTR Homes: The organization seeks the elimination of council tax liability for new BTR homes during the initial twelve months after completion, arguing this would encourage quicker lettings.
• Zero-VAT for Energy-Saving Materials: They are advocating for a zero-VAT rate on energy-saving materials used in refurbishments to enhance the viability of older rented properties.

Need for Immediate Government Action

A BPF spokesperson highlighted that the ongoing economic and regulatory challenges are dampening investor confidence. The persistent layers of regulation, taxes, and levies hinder development, contradicting governmental efforts to support the construction sector.

The BPF emphasizes the urgent need for reforms, arguing that failing to address the crisis in the development sector risks stalling not only construction but also economic growth across the UK.