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RLA: stamp duty hike will drive up rents

The Residential Landlords Association (RLA) has warned that the stamp duty hike announced in the Autumn statement will only worsen the current shortage of accommodation and drive up the cost of rents.

The Chancellor stated that ‘solving the housing crisis was a top priority’. But the RLA said the focus again seems to be help for first-time buyers and home ownership with the announcement that those buying second homes and investing in buy-to-let will pay an extra 3%  stamp duty than others buying a primary home to live in.  

This is another hit for landlords who are still anxious about how changes to mortgage interest relief (MIR) announced in the Summer Budget will affect them.

Given that the private rented sector has accounted for the large majority of new dwellings created in England between 1996 and 2013, this extra burden threatens to reduce the number of new homes available at a time when demand continues to rise.

RLA chairman Alan Ward said: “The biggest losers from the Autumn statement are tenants who will now find it even harder to get the accommodation they want at a price they can afford. The extra stamp duty on buy to lets will exacerbate an already serious shortage of properties in many areas reducing choice and driving up rents.

“The government should be encouraging landlords to invest, not doing everything they can to discourage them.”

  • John Ahmed

    This has nothing to do with helping anyone except the treasury again.
    The chancellor should simply be more honest about the reasons why.
    The current measures will reduce housing available overall.
    Unless of course the goverment plan is to reduce the overall housing in the UK...and that i cannot see..

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    You are completely right John. As a lifelong Tory voter I will never put a 'X' next to a Conservative candidate again. The tax changes are nothing to do with helping FTBs and the long term consequences of the changes will be devastating. The trouble is that the Chancellor is focused on just one thing - to clear the deficit and he's using tax on landlords as a major tool, assuming everyone is going to fall for the spin. Alas many have, especially the youngsters who don't recognise how this will actually make their predicament much much worse, not just in the forseeable future but possibly for their whole lives.

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    It seems that some landlords are objecting to the increase in stamp duty for second homes by stating it may increase the housing shortage (no evidence). Of course the real reason they are objecting is that they just don't want to pay more tax. But even the Conservatives are stating that 'those with the broadest shoulders should pay more tax' - we landlords are the richest and most privileged and of course during hard times we should pay more. Ditto the abolition of the 10% wear and tear allowance - how many employers would allow their employees to claim expenses when these may not actually have been incurred? As a landlord I will be course be worse off, but recognise these changes are just and progressive ones. Let's now be honest and not selfish.

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    David Wirth, I don't know if you were born with a silver spoon in your mouth or if you work for Shelter. In any case, you are talking complete twaddle. This single-parent, sole earner landlady with a full-time job and mortgage of her own is certainly not a member of the 'richest & most privileged' club. Like most of my fellow landlords, I have invested my hard-earned money not in pension policies but in property. Like most of my fellow landlords, my profit margins are small and -thanks to the government's ever increasing legal/admin requirements and tenant's increasing presumption that they somehow have a right to a property they haven't paid for - are getting ever smaller. I, for one, will no longer be investing in British property or indeed British industry but will be taking my investment abroad. Which means the treasury will receive no more tax from me, another tenant will be turfed out of his home and - with the price of property today - the buyer will most likely be an overseas investor. So well done to George O and people like yourself. Give yourself a collective clap on the back. You've done this country proud.

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    M goe, well we don't need narrow minded amateurs like you in the industry, so please sell up and leave, the UK will be a better place without you.

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    This is just scaremongering by the rla. No evidence it will reduce housing supply. What it may well do is damp down house prices, which overall would be a good thing, including for buy to let investors.

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    Not just the stamp duty hike, but the abolition of landlords' right to offset finance costs and the re-definition of costs which have been paid to the mortgage lender as 'profit' to be taxed (bizarre), has already led to landlords going into survival mode. We will not buy any more houses in this insecure taxation environment, so for example, I would not buy a terraced house off an owner-occupier who may want to buy a more expensive new-build. In many of these cheaper areas, there are no 'first-time buyers' as often people don't have the work or lifestyle to have saved for a deposit... these potential sellers will be stuck with far fewer buyers around and the demand for new-builds will drop. Anything wrong with that logic?

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    Paul Golofino, I have been a landlandy for 25 years and made it through 2 major market crashes and the deepest depression since the last war.

    You can pipe up when you can say the same. Until then, I suggest you keep it shut.

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    I am a land lord (!!) - with 5 property portfolio that I built over last 8 years. The mortgage deposit and buying expenses came straight from my own hard earned money from my job and since I bought the properties, I have been spending far more money and time managing these than I am getting in return. I am raking up lot of debt on these properties and to match up the books, I have to work harder in evenings and weekends for last many years! This has taken away my family life and peace and am on brink!! I can't even sell up as the property prices in the area haven't gone up although orignally idea was that I will sell up half of the properties when I retire and pay the mortgages for the rest from the proceeds and earn rent as my pension!! I don't advocate this strategy to any one any more!!

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    The above description was just to show that many if not most of the pvt landlords are in similar situation as myself and taxing further, reducing tax benefits to BTL investors is only going to make it even harder to invest or hold investment in this sector. The chancellor I am sure did not think of all this when he decided to tax the BTL sector. I think it is a very ill judged decision on his part!!

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