The Stamp Duty surcharge on buy-to-let properties may be starting to bite, it has been claimed.
A crowdfunding platform, Property Partner, says new rental properties listed by landlords in May were down 5.7% on March levels before the extra 3% surcharge was introduced.
Every month, Property Partner – which invites investors to take out shares in the ownership of individual properties – looks at the number of new rental properties listed on Rightmove in 89 major towns and cities across the UK.
After the stampede of landlords putting rental properties on the market in April, last month saw a sizeable, but not altogether surprising, 15.4% drop in new rental listings.
Worcester experienced the biggest decrease in rental supply in May from 481 to 276, a drop of 42.6% following a near 50% surge in new listings in April. New rental listings were also 14.6% below March levels. Bedford saw a huge 41.7% drop in new rental listings in May from 266 to 155 compared to April, and 33.5% down on March.
Dan Gandesha, chief executive of Property Partner, said: “June’s figures will show whether this is just a market adjustment, or something more fundamental. It’s unfortunate timing with the EU referendum just two weeks away.
“But April’s Stamp Duty changes are just the first in a series of additional costs being piled on traditional buy-to-let. In the longer term, the private rented sector must be professionalised, to provide Generation Rent with enough good-quality homes at rents they can afford.”
I went to a auction viewing last week on a house I was looking to buy from a long established and well respected auction house. I was the only one there. I enquired about interest from previous viewings and I was told I was the only one.
The house didn’t sell at auction this week. – Because I too factored in the reserve price + stamp duty and figured it was too much.
This is likely to be short term. Landlords who brought forward buying plans will return in time, but in smaller numbers. And vendors will adjust pricing.
But landlords have other worries. The removal of tax relief on mortgage interest payments coming in next year (subject to a judicial review) will have a massive impact on profits.
Add to that the reduction in the benefits cap to £20k in Autumn – That will make it less appealing to landlords renting to large families relying on housing benefits over worries that the rent will not be paid.
We presented at a meeting to Calderdale Landlords Association last night and all these fears were raised.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Oh Goody,
The government are taking action to drive up rental prices further! Strange when they are in a hole (with insufficient housing) what do they do? dig deeper!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register