Buy to let sector disappointed by UK Chancellor’s failure to address their concerns
There was disappointment for buy to let landlords in the UK when Chancellor Philip Hammond did nothing for the lettings sector when delivering his Spring Budget.
It had been hoped that he might re-visit the extra 3% in stamp duty imposed by his predecessor last year on additional homes and that he might also reconsider the changes to tax relief on buy to let mortgages due to come into force from next month and the ban on letting fees.
Some experts said that overall it must be a first that there was no mention in the Budget speech which is the last to be delivered in March with the format switching later this year to an Autumn Budget and then a Spring statement next March.
Many think that it will now mean rents rising across the UK this year as a combination of higher stamp duty on additional homes, less tax relief, the ban on lettings fees and tougher rules for buy to let mortgages combine to make it harder for landlords to make a living.
Steve Bolton, founder of Platinum Property Partners, pointed out that the silence in the Budget relating to the private rented sector will have a major impact. ‘There is a fundamental misunderstanding of how the buy to let sector operates at the heart of this policy and it also completely contradicts the importance placed on the rental sector in the Government’s recent housing white paper,’ he said.
‘When this tax was introduced in Ireland, rents soared until the Government was forced to repeal its policy. The same will undoubtedly happen in the UK. But while we wait for Government to realise its mistake, thousands of hardworking tenants and landlords will suffer,’ he added.
The Government is playing with people’s lives and livelihoods, according to James Davis, chief executive of online lettings agency, Upad. It was disappointing to not see a U-turn on the catastrophic decision the Chancellor made in the Autumn to ban lettings agent fees. As predicted, rising rents are already on the cards for long suffering tenants with renting now a necessity, as home ownership is out of reach for most millennials,’ he said.
‘Tenants are in some cases already paying up to two thirds of their salary on rent, whilst salaries have stayed stagnant. This will have wider consequences if people can’t afford to go on holiday, or spend money on entertainment. The Government need to realise that they are playing with people’s lives and livelihoods. Buy to let landlords should be enticed through tax incentives, rather than hiking stamp duty, to bring the rental market back into equilibrium,’ he added.
Glynis Frew, chief executive of Hunters Property, believes it is short sighted as the buy to let market has already seen a substantial hit from the second home stamp duty levy and the failure to address landlord concerns could lead to many opting to come out of the sector.
She argues that the resulting reduced supply or increased costs could mean an increase in rents. ‘The more average rents rise, the more ownership figures fall. This is a bad decision which will affect not only landlords but renters, first time buyers and second steppers,’ she added.