The British Property Federation has urged the Chancellor to use the Spring Statement to reinstate Multiple Dwellings Relief (MDR), arguing that the move would unlock thousands of delayed rental homes while increasing overall tax revenues.
MDR, a bulk purchase relief within Stamp Duty Land Tax in England and Northern Ireland, was abolished in 2024. The federation estimates that its removal stalled or undermined the delivery of up to 25,000 build-to-rent (BtR) homes by making schemes financially unviable.
The organisation says the Treasury’s savings from scrapping the relief are outweighed by the wider losses from homes that were never built. These include reduced Stamp Duty Land Tax receipts and lower economic activity linked to construction.
According to BPF estimates, introducing a more targeted version of MDR for the BtR sector would cost the government about £155m. If that policy change unlocked the 25,000 homes affected by the abolition, the resulting construction activity could generate around £650m in wider tax revenues.
Construction activity in the BtR market fell sharply in 2025 as viability pressures increased. New London starts dropped to 613 homes, down 80% on the previous year. In regional markets, starts declined by 37%, from 12,781 to 8,063, based on figures from the BPF and Savills’ latest sector report.
The federation expects these pressures to continue into 2026, creating further risks for the government’s housing delivery targets unless policy intervention improves development economics.
The removal of MDR also reduced the value of BtR portfolios by an estimated £4bn, limiting the sector’s ability to invest in new schemes. BPF argues that reinstating a targeted form of the relief would restore balance between large, high-density developments and smaller, lower-scale projects.
The federation said a revised MDR could support the delivery of purpose-built rental housing while offering better value for money than the current approach.
BPF says the case for intervention rests on three core impacts of the MDR abolition:
Up to 25,000 BtR homes have been stalled or made unviable.
Portfolio values across the sector have fallen by an estimated £4bn.
Construction activity has dropped sharply in both London and regional markets.
The federation believes restoring a targeted version of MDR would provide a faster route to increasing housing supply than waiting for broader market conditions to improve, while also delivering a net gain for public finances.
Melanie Leech, chief executive of the British Property Federation, said, “The tax system is undermining the viability of much-needed new homes in London and across the country. An extremely cost-effective way of unlocking viability and enabling stalled housing to proceed to construction would be through the reinstatement of targeted MDR."
"Given the combination of fiscal pressures and low housing numbers, the government is facing, this is a simple lever to pull that would help address the viability crisis and increase Treasury returns. We urge the Chancellor to act now rather than delay until the Autumn, when the housing delivery numbers will be as stark for 2026 as they have been for 2025.”
