Could stamp duty levy be scrapped for landlords buying new-builds?

 

As the number of renters across the UK rises, we could be at risk of losing thousands of available homes because of government measures stifling the sector.

The private rented sector could be set to lose as many as 133,000 homes for rent over the coming 12 months, according to a new report from leading landlord body the Residential Landlords Association (RLA) through research compiled by PEARL.

With most landlords citing increased tax charges and reduced profits as the main reason for exiting the sector, the results have led the RLA to call on ministers to bin the additional 3% stamp duty charge on second homes for landlords who invest in property that adds to the overall supply of housing, such as those investing in new-build properties, as a way of incentivising landlords and lowering the number who feel they are being “forced” out of the industry. This would also include those investing in office and shop conversions, splitting large homes into self-contained properties for rent or bringing an empty home back into use.

Landlords are being put off

While a huge 84% of landlords and industry members have seen tenant demand rising or remaining stable, the demand could fail to be met over the coming year as more landlords are put off or priced out by government measures such as the stamp duty surcharge and the phasing in of Section 24 which will mean landlords’ mortgage interest relief will be restricted to the basic level of income tax.

The report says: “These changes make it easier for those who are wealthier and cash-rich to invest in the private rented sector, over those middle income earners that may look to purchase a property with finance while also limiting the access of the sector for the more vulnerable tenants and those who can’t afford to buy [and] can’t access social housing.”

Taxation should be used positively

RLA policy director David Smith commented that despite the government’s plan to try and increase homeownership in the UK, demand for rental homes continues to rise.

“The Government was always mistaken to place homes to own and to rent in opposition to each other rather than seeking to supply more homes in all tenures.”

“The vast majority of landlords are individuals and small businesses, providing good housing to their tenants and supporting local economies. We need to support and encourage them to provide the long-term homes to rent needed,” he added.

“The government should use taxation more positively and not penalise landlords who are contributing to badly needed homes to rent.”

By scrapping the 3% stamp duty surcharge for those purchasing investment properties that are adding to the housing stock, the growing rental demand could still be met and would see landlords feel more incentivised to buy good-quality, new-build properties to rent out, which could in turn improve the sector for tenants.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

Top eight housebuilders make big gains for investors

Could stamp duty levy be scrapped for landlords buying new-builds?

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.