Jeremy Hunt’s Spring Budget Capital Gains Tax cut on second home property sales from 28 per cent to 24 per cent could persuade landlords to sell up because of the ever increasing  regulations, costs of schemes, the Rental Reform Bill and the impending General Election.

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The new ‘friendlier’ rate will start from April 6th as released documents from the Treasury say: “This will encourage landlords and second homeowners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time.”

So in real terms those paying a higher tax rate and making a £20,000 gain on a second home will be £680 better off.

However some comments are criticising the government’s move that it should be focussing its attention onto new rental stock builds instead of encouraging landlords to sell up rented homes.

Partners at a chartered accountants and business advisory firm, said: “It appears the government are discouraging private buy to let landlords and persuading them to leave the market.”

A spokesman for an end-to-end business technology provider for estate agencies, said: “This may (as the Chancellor claims) result in more transactions, but I’m wary that this simply means shifting supply from an already heated lettings market to the sales side, leading to an increase in rents amidst reduced supply in the sector as disillusioned landlords take advantage of this opportunity to sell-up.”

Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said the government should have instead cut the 3 per cent extra stamp duty charge.

Davies said: “The Chancellor’s announcement… is little more than a sop to those landlords forced to exit the private rental sector by tough economic conditions and a punitive taxation system.

“IMLA would like to have seen the Chancellor offer more support to the sector by announcing a reduction in the 3% additional Stamp Duty which has been levied on second and subsequent property purchases since 2016.

“This extra tax is an added financial burden on the private sector landlords who provide homes for 20% of the UK’s households, at a time when our research indicates they are anticipating an increase of 80% in their mortgage costs over the next two years.

“Given the dramatic imbalance between supply and demand in the private rental sector, which has pushed rents to record levels, an incentive to encourage landlords to invest in more properties and increase supply would have been very welcome.”

It is planned that on January 1st 2025 to slash the capital gains tax exempt amount by half from £6,000 down to £3,000  which will in effect lessen the reduction.

A property finance company’s spokesman was far more optimistic when saying it was a “welcome move to help extend the market to a new wave of buyers and property professionals.