The government should aim to stimulate housing market activity post-lockdown by abolishing the 3% stamp duty surcharge for buy-to-let landlords buying additional properties, according to Mary-Anne Bowring, managing director at Ringley Group.
Bowling argues that scrapping the stamp duty surcharge would encourage buy-to-let investors to return to the rental market to help meet the rising demand for rental homes and drive transaction levels.
Additional regulation, higher stamp duty and reduced mortgage relief have led to many buy-to-let investors exiting the rental market, with the number of private landlords hitting a seven-year low in 2019, data from Hamptons International shows.
However, Bowling, like many professionals working in the letting sector, expects to see the disruption and uncertainty caused by COVID-19 cause a spike in rental demand once the existing lockdown measures are eased, as households put off major financial decisions such as buying a home and opt to rent for longer, underlining the need for more rental homes.
She said: “A stamp duty holiday would no doubt cause a rush of transactions and help breathe life into a housing market that has been put into deep freeze in an effort to battle coronavirus.
“The government should be looking at long-term solutions as well as short-term sticking plasters when it comes to fixing the UK housing market.
“Millions of Brits were already renting, and that number was predicted to grow anyway with or without coronavirus. The disruption caused by coronavirus will likely see rental demand grow, as banks squeeze potential buyers with tighter lending restrictions and people put off buying or selling a home as it becomes clearer Covid-19 will cause continued uncertainty and disruption in the medium term.
“Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market. Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”