13th
Jul 2016
The newly appointed Chancellor of the Exchequer, Phillip Hammond, is being urged by the president of an association of estate agents to grant an amnesty on stamp duty for all professional medium sized and corporate landlords. Simon Gerrard the president of the association says that by suspending the stamp duty, it will help cap rent increases and ease the housing crisis.
The stamp duty increase caused a surge of landlords to purchase buy-to-let properties before the 1st April, resulting in the lowest level of activity in the ensuing months for some years and in all likelihood that if there is a low level of supply in the rental market then rents will be automatically increased. Gerrard is calling for the suspension of the 3% stamp duty for landlords who have a five plus property portfolio.
Simon Gerrard, who is also the managing director of an estate agent, said: “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.”
He continued by saying that: “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.
“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.”
There have also been calls from all sector organisations asking the government to seriously re-consider their recent tax and duty policies that have been introduced onto the private rented sector. Already many landlords have sold up as they became increasingly frustrated by new legislations as well as the threat of the oncoming reduction of mortgage interest relief.
One spokesperson for a landlord group, said: “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 home ownership, 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.”
Richard Merrick of PIMS, said: “ The government has constantly ‘plagued’ landlords financially, the reduction of the ‘wear and tear’ allowance, corporate tax, mortgage interest relief, the onerous stamp duty surcharge; coupled with a Klondike Gold Rush of councils introducing overpriced and unfair licensing schemes, it is no wonder that many honest and hardworking landlords are leaving the sector in disgust.
Richard added: “ At the end of the day it is this government and earlier governments that have put mortgages out the reach of potential first time buyers as house prices have risen sharply because they have not fulfilled their commitment to the public by building enough new houses. They will now be responsible for increasing rents as landlords will not wish to invest in further properties and availability will be lowered.”
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