Despite pressure from the property industry, including landlords, letting agents and housebuilders, the chancellor Philip Hammond opted not to reverse the additional 3% stamp duty surcharge on second homes, including buy-to-let properties nor reinstate the mortgage interest tax relief for buy-to-let landlords in the Budget yesterday.
This will almost certainly lead to a further reduction in the number of small and individual buy-to-let landlords investing in the private rented sector, according to Richie Tramontana at Red Property Partnership estate agents.
“Many [buy-to-let landlords] have been deterred from investing, and the looming ban on letting agent fees to tenants is likely to lead to another charge being pushed towards landlords,” said Tramontana.
Glynis Frew, chief executive of Hunters estate agents, also viewed yesterday’s rather low-key Budget statement as yet another missed opportunity to prop up the housing market and boost the supply of much needed private rented properties by supporting buy-to-let landlords.
Frew said: “We are disappointed to see tax relief for landlords is still due to be cut next month. The buy-to-let market has already seen a substantial hit from the second home stamp duty levy and this further strain on landlords will undoubtedly adversely affect the property market. This could mean landlords opting to come out of the PRS, creating reduced supply or increased costs which could again mean an increase in rents.
“The more average rents rise, the more ownership figures fall. This is a bad decision which will affect not only landlords but renters, first-time buyers and second steppers.”