May 2008

MPs Back Federation of Master Builders' Call for VAT Cut

The Federation of Master Builders (FMB) today welcomes the conclusion in the House of Commons Communities and Local Government Select Committee report on the supply of rented housing calling for a reduction in VAT on repairs and maintenance.

The report states the high rate of VAT makes it too expensive for many landlords to maintain or refurbish their properties and encourages neglect leading to demolition and new build. Moreover, the financial disincentive to repair and maintenance work caused by the high rates of VAT is often the root cause that allows homes to fall into disrepair in the first place. The resulting vacancy and dereliction blights whole neighbourhoods, depresses property values and attracts crime, putting unnecessary demands on the police and fire services. Conversely, the regenerative effect on the street and the wider neighbourhood of reusing empty property can be striking.

Brian Berry, Director of External Affairs at the FMB said, "According to the Government's own figures, there are 7 million homes classed as "non-decent" in England alone i.e. substandard in terms of their state of repair, kitchen and bathroom facilities, heating and insulation, a disproportionate number of these homes are in the private rented sector. The current high rate of VAT on building repair work acts as a disincentive for private landlords to maintain their properties. In many instances, this results in tenants living in misery because their landlords will not carry out basic repairs on their properties. What makes this worse is that these tenants tend to be the most vulnerable people in our society, with the elderly particularly at risk."

Berry continued, "A reduced rate of VAT from 17.5 % to 5% has the potential to make a positive impact in areas that need regenerating as well as supporting environmentally sustainable improvements to properties that reduce carbon emissions."

22 May 2008

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