Britain’s new chancellor, Philip Hammond, is being urged to consider a suspension of Stamp Duty for both corporate and medium-sized landlords. Simon Gerrard, a director of estate agents Martyn Gerrard and a former president of the National Association of Estate Agents, believes that this is necessary before rents spiral out of control, thereby heating up the crisis in affordable housing supply.
The frenzy of buying activity from people in the buy-to-let business, before the additional homes surcharge was introduced earlier this year, has meant that fewer would-be investors are buying property, leading to less availability in the rental market. There is concern among many who follow this market sector that this will lead to a steep increase in the price of renting from private landlords. According to Simon Gerrard, the only way to prevent this is for the chancellor to suspend the recently introduced 3% surcharge for landlords with a portfolio of more than five properties.
“In the wake of Brexit, the only people pulling out of deals are investors,” he says. “The chancellor’s Stamp Duty hike on second homes in April had already sent them running for the hills, but Brexit could now be the final nail in the coffin.
“We already have a serious housing shortage, particularly in London, and desperately need to support medium-sized landlords, so they can continue to provide much-needed accommodation to the so-called Generation Rent. The only way to keep these individuals in the market and encourage them to ‘keep calm and carry on’ in the midst of much panic is through removing the tax disincentives.
“Brexit, a double whammy tax from George Osborne and a spooked property market: there is only so much an investor will take before they simply put their money elsewhere, which will derail the supply of new rental property to the market and mean an immediate spike in rental prices. Nobody wants to see what that will look like for this country’s housing crisis.”
The Residential Landlords Association also wants the chancellor to re-think government policy on privately let housing, and to see that the introduction of the surcharge and reduction of mortgage interest relief due next year will cause a rise in rents, so making affordable rented housing even more difficult to find.
“Access to decent, affordable homes to rent is vital to support a flexible labour market, and ensuring that young people and families have a place to live,” says the Association’s chairman, Alan Ward.
“Whatever the new government does to support home ownership, demand will continue to increase for homes to rent. The new chancellor has an important opportunity to reverse punitive tax changes and support the majority of landlords who are providing good housing to their tenants to invest in the new homes we need.”
Both homebuyers and those buying an additional property for investment can see how much Stamp Duty they expect to pay with our easy-to-use, quick Stamp Duty Calculator. [Link]