Government moves to boost the quality and number of properties in the private rented sector today met with fierce criticism from landlords who said: "It is simply not enough."

Members of the Residential Landlords Association (RLA) hit out after Chancellor Gordon Brown announced he would reduce VAT on improvement schemes in regeneration areas as part of the budget in March.

Mr Brown said reducing the rate to five per cent would encourage private investment in areas earmarked for regeneration but members of the RLA argue it provides minimal benefit for landlords taking risks on houses in poor areas, while also creating the extra burden of even more red tape.

Chairman Martin Moylan said: "It just doesn't pan out. The Chancellor wants landlords to take risks on properties in regeneration areas to provide more and better quality housing in the wake of the high demand for rented homes, but this concession is not enough to warrant such a risk.

"If homes are vandalised and damaged the five per cent VAT is going to have no impact whatsoever in recouping those costs and meanwhile they face increased red tape in accounting for the reduced rate."

The association, whose members control £1.2billion worth of property and more than 30,000 tenancies across the UK, is also concerned about the simultaneous effect of increasing stamp duty on lettings and property purchases, as well as introducing the Minimum Repair Allowance (MRA), which ring-fences housing budgets to council property.

Mr Moylan went on: "All these things, as well as movements within the Inland Revenue are all pushing up rents in what is currently a thriving marketplace.

"We understand that Mr Brown is aiming to boost housing regeneration but he is having a negative effect on the sector at the same time.

"We would prefer to see him reduce stamp duty, reverse the decision to charge council tax on empty properties and reinstate the funding for private sector grants.

"Real incentives such as zero rate Capital Gains Tax and other tax holidays for risky investments would be more welcome in regeneration areas."

ENDS April 2001

Notes to editors:

The RLA, the country's leading voice in the private rented sector, has branches throughout the UK and holds regular meetings within 30 minutes drive of all members.

It also offers a comprehensive package of benefits which includes training programmes, an advice hot-line and a magazine, as well as deals on legal services and insurance and a free tenancy agreement which carries the Crystal Mark awarded by the Plain English Campaign.

For more information, visit www.rla.org or to search for rented property on the RLA's accommodation website, www.homes2rent.net.