Young people need more support in rental sector, report suggests

Young people need more support in rental sector, report suggests (Oko_SwanOmurphy via iStock)

A series of proposals that could significantly impact on London's rental market have been suggested in a report by the Resolution Foundation aimed at reducing intergenerational unfairness.

The publication, titled A New Generational Contract, offers a range of steps to tackle the wealth gap between generations and much of this focuses on the issue of housing, both in terms of the difficulty faced by young people trying to get on the housing ladder and the challenges they face in the rental sector. 

A key proposal that could boost the supply of rental housing is for build-to-rent developments to be made exempt from stamp duty. This measure would have a major impact on areas where build-to-rent is well established, such as London and the north west, as well as aiding its growth on other parts of Britain. 

Other measures are designed to make life easier for renters, not least when it comes to the security of tenure - with all tenancies being made of indefinite length as they now are in Scotland, plus a 'light touch' regulation limiting three-year rises in rent to the Consumer Prices Index level of inflation. 

However, other measures are more specifically designed to help young people and others who rent to move into home ownership more easily. 

These include a plan to allow city and city region mayors to impose embargoes on the purchases of homes in property hotspots by non-UK residents. This would have obvious implications in London, where many new properties are snapped up as investments by overseas buyers, and may also have an impact, if imposed, in areas such as central Manchester and Salford. 

A key element of the plan would be to change the tax system to raise extra funds at the expense of more wealthy older people and provide a windfall for the young. 

This would see council tax being replaced with a new property tax skewed towards charging more for higher-value properties, and ditching inheritance tax for a new system of taxing the receipts of gifts. 

According to the Resolution Foundation, this would raise an extra £5 billion a year, which could be used to give each 25-year-old a one-off payment of £10,000, something that could help pay for a housing deposit.