The former president of the National Association of Estate Agents (NAEA) is calling on the new Chancellor, Philip Hammond, to consider a stamp duty suspension for professional medium-sized and corporate landlords to help prevent rents from spiralling out of control and exacerbating the housing supply crisis.
With fewer buy-to-let investors acquiring property following the introduction of the stamp duty surcharge for those acquiring second homes, there is some concern that the availability of homes in the PRS could lead to a sharp rise in rents, and so the only way to prevent that from happening is to suspend the extra 3% stamp duty for mid-tier landlords – those who have five or more properties in their portfolios – according to Simon Gerrard.
Gerrard, who is also the managing director of Martyn Gerrard estate agents, 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 added: “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.”
Last week, the Residential Landlords Association (RLA) urged the new Chancellor to rethink the government’s approach to private rented housing and recognise that forcing some landlords to sell up and stifling investment through higher stamp duty on buy-to-let homes and by cutting mortgage interest relief – set to come into play from next year - will only make it more difficult for many people to find suitable housing and will push up rents for those in rented accommodation.
Alan Ward, chairman of the RLA, 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.”