The ex-President of the National Association of Estate Agents (NAEA) has urged the new Chancellor, Philip Hammond, to suspend the 3% Stamp Duty surcharge for medium-tier landlords, which he believes would help prevent rents from spiralling and exacerbating the housing crisis.
New Chancellor Urged to Suspend Stamp Duty Hike
With a drop in landlords purchasing buy-to-let properties following the introduction of the 3% Stamp Duty surcharge in April, there is some concern that the supply of rental properties could lead to a sharp rise in rents. Simon Gerrard insists that the only way to curb this increase is to uspend the surcharge for mid-tier landlords – those with five or more properties in their portfolios.
Gerrard, who is also the Managing Director of Martyn Gerrard estate agents, explains: “In the wake of Brexit, the only people actually pulling out of deals are investors. 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 providing 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.”
He adds: “Brexit, a double-whammy tax from 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.”
Last week, the Residential Landlords Association (RLA) also called on the new Chancellor to reconsider the Government’s approach to the private rental sector, and to recognise that forcing some landlords to leave the market and preventing investment through higher Stamp Duty and a reduction in mortgage interest tax relief will only make it more difficult for many people to find suitable homes and will push up rents for private tenants.
The Chairman of the RLA, Alan Ward, comments: “Access to decent, affordable homes to rent is vital to supporting a flexible labour market, and ensuring that young people and families have a place to live.
“Whatever the new Government does to support homeownership, demand will continue to increase for homes to rent.
“The new Chancellor has an important opportunity to reverse recent 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.”