The Government has weakened its own efforts to build 1.5 million homes following the abolition of Multiple Dwellings Relief (MDR), which has led to a 20% contraction in the build-to-rent sector according to research by Savills.

The British Property Federation (BPF) believes that it has resulted in as many as 25,000 fewer BTR properties being built and a 12% drop in planning applications.

Fell swoop

Also, the Association for Rental Living (ARL) estimates that scrapping the MDR “wiped between £400-£800 million off (BTR) valuations in one fell swoop”.

Multiple Dwellings Relief (MDR) was introduced in 2011 to encourage investment in residential property. It provided a substantial relief on Stamp Duty for purchases of two or more dwellings in a single transaction or linked transactions.

It was a relief, though, that was often abused by unscrupulous landlords and when it was abolished in June 2024, few people even noticed or complained.

Similar to the Renters’ Reform Bill, the abolition of MDR has affected the entire rental sector.”

Its effects are only now coming to light and BTR special adviser James Pargeter outlined the scale of the problem to the DeveloperLive magazine, saying: “Similar to the Renters’ Reform Bill, the abolition of MDR has affected the entire rental sector.

“But taking a measure to target relatively small rogue players at the smaller end has an adverse effect on the rest of the market.”

Although BTR currently only represents 2% of the UK’s housing market, it is seeing increasing investment and is regarded as a key future component of the Government’s plans to boost housebuilding.