The National Residential Landlords Association (NRLA) is calling for the chancellor Jeremy Hunt to abolish the 3% stamp duty levy on the purchase of additional homes, including buy-to-let properties, ahead of his Budget statement in March.
Increasing the supply of homes for private rent would boost the government’s finances by around £10bn, equivalent to almost the entire Affordable Homes budget, according to the NRLA.
The assessment follows the submission of NRLA’s proposals to the government ahead of the Budget on 6 March, amidst a supply crisis in the rental market. Research findings suggest that an average of 11 prospective tenants now make enquiries about every available property to rent.
Independent analysis by Capital Economics also reveals how scrapping the 3% stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes made available across the UK.
As a result of increased income and corporation tax receipts, Capital Economics’ modelling indicates this would lead to a £10 billion boost to Treasury revenue over the same period. For context, this is the equivalent of almost the entire £11.5 Affordable Homes Programme budget for 2021-26.
The stamp duty levy was introduced in 2016 with the then chancellor, George Osborne, arguing that it would prevent landlords squeezing out families who want to become homeowners. His reasoning was refuted by the London School of Economics which argued that “nationwide only a minority of sales to landlords involved bids from both types of buyer.”
Its views have been shared by director of the Institute for Fiscal Studies (IFS), Paul Johnson, who warned in a piece for The Times that: “The more harshly that landlords are taxed, the higher rents will be.”
Ben Beadle, chief executive of the NRLA, said: “The chancellor needs to pull out all the stops to tackle the housing crisis.
“Growing the private rented sector is not only vital if tenant demand is to be met, but it would also provide a substantial boost to Treasury coffers, enabling it invest in vital public services.
“It makes no sense to discourage investment in desperately needed private rented accommodation. Inaction will only result in more misery for prospective renters.”
The first thing to do is qualify what counts as an “additional home”.
At the moment, rental properties are thrown in with weekend retreats or weekday bases for work as additional homes. All of them serve different purposes, and have a different impact on communities.
Weekend retreats – there is absolutely an argument for charging a levy, especially as they may price out locals in prime areas.
Rental properties though, simply are NOT additional homes and given the good they do in the community in providing an “only” home for those who genuinely need them, and also given that the government are repeatedly missing their targets for building social housing, then there is even an argument for incentivising private landlords, rather than penalising them with the 3% surcharge.
Simply, it needs getting rid of. Right now.
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If we did what NZ did and blocked foreigners buying property it would help , and as for removing additional 3% on 2nd homes that panders to the super rich .
Whats needed is removing Stamp Duty altogether when downsizing because across the South millions of elderly stay in the Family Home because the sheer costs of downsizing when you add in all the costs and stamp duty and bringing another home up to the same standard of maintenance free condition simply does not make financial sense .
Theres some green eyed monster that thinks those who were able to buy a house in the 60s are rolling in it and had it easy …sadly they have absolutely no idea of the struggles that existed in the 60s or the make do and mend and go without mentality we all had.
Yes theres a shortage of rental properties and mortgage rates are 5% and its hard to raise a deposit plus high house prices but if people do some checking they will find most of us paid 5% on our mortgages most of its 25 yrs and 12 or 15% for quite some time . There needs to be a very different attitude from Government .
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We will have a Labour government by Christmas, and landlords are anathema to them. It doesn’t matter about the housing crisis or high rents, just as long as they can keep bashing greedy landlords for political ends.
But I think we are at a tipping point, where political dogma will crash into dire need among their typical voter [not the big city champagne socialists].
I can see them now, arguing and pulling their hair out, as they try to square incentivising landlords to provide affordable housing, with their past dogmatic position.
Anyways… not my problem for much longer. But I will miss these discussions.
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