Builders' group claims VAT reduction would ease accommodation crisis

A group representing builders said there is no incentive for their members or investors to get involved in rental accommodation.

It follows renewed warnings of the pressure on the market, as the number of homeless families increases and students search for college accommodation.

New figures show the number of available properties is down by more than 2,000 this month compared to the same time last year.

Tom Parlon of the Construction Industry Federation said a cut in VAT rates would help the situation.

"There's a major, major harvest in those apartments for the exchequer. But because we're not building them, they're not benefitting from that tax take," he said.

"We've estimated that a reduction in the 13.5% [VAT rate] to 9% would self-finance if we had a 14% increase in building output [as a result].