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The impact of the Business Expansion Scheme on the supply of privately‐rented housing

The impact of the Business Expansion Scheme on the supply of privately‐rented housing Discusses the Business Expansion Scheme (BES) which was extended in 1988 to companies letting residential property on assured tenancies. This was intended to provide a stimulus to privately‐rented housing in the UK and to foster the development of more company landlords. Presents the results of research into the success and impact of the BES in the privately‐rented sector. In its nearly six years of existence the scheme attracted $3.4 billion of investment from private individuals, over 900 companies were formed and 81,000 dwellings were brought into the private‐rented sector at a cost of £1.7 billion in tax relief. While many of the new companies were not the new model landlords which the Government is trying to encourage (the scheme being adapted by universities, housing associations and mortgage lenders for their own purposes), the supply side impact has been considerable, accounting for up to one‐sixth of new privately‐rented properties and a more than doubling of the number of “commercial” company landlords. Although many non‐entrepreneurial company dwellings are likely to leave the sector in the near future, recent taxation changes may allow many commercial BES companies to continue letting. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Property Finance Emerald Publishing

The impact of the Business Expansion Scheme on the supply of privately‐rented housing

John Hughes
Journal of Property Finance , Volume 6 (2): 13 – Jun 1, 1995
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Publisher
Emerald Publishing
Copyright
Copyright © 1995 MCB UP Ltd. All rights reserved.
ISSN
0958-868X
DOI
10.1108/09588689510096060
Publisher site
See Article on Publisher Site

Abstract

Discusses the Business Expansion Scheme (BES) which was extended in 1988 to companies letting residential property on assured tenancies. This was intended to provide a stimulus to privately‐rented housing in the UK and to foster the development of more company landlords. Presents the results of research into the success and impact of the BES in the privately‐rented sector. In its nearly six years of existence the scheme attracted $3.4 billion of investment from private individuals, over 900 companies were formed and 81,000 dwellings were brought into the private‐rented sector at a cost of £1.7 billion in tax relief. While many of the new companies were not the new model landlords which the Government is trying to encourage (the scheme being adapted by universities, housing associations and mortgage lenders for their own purposes), the supply side impact has been considerable, accounting for up to one‐sixth of new privately‐rented properties and a more than doubling of the number of “commercial” company landlords. Although many non‐entrepreneurial company dwellings are likely to leave the sector in the near future, recent taxation changes may allow many commercial BES companies to continue letting.

Journal

Journal of Property Finance – Emerald Publishing

Published: Jun 1, 1995

Keywords: Business expansion schemes; Housing; Investment property; Rental growth; Taxation

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