A London agent has said George Osborne has done more than any other Chancellor in history to help the lettings industry.
The comment, by Benham & Reeves Residential Lettings, comes after Osborne has effectively declared war on private landlords by introducing a 3% Stamp Duty surcharge and changing the rules on tax relief.
However, the agent says that in London, much higher rates of Stamp Duty Land Tax are turning home hunters – including families looking for ‘modest homes’ – away from purchasing in favour of renting.
The firm says that with demand continuing to rise and the anticipated exit of amateur landlords from the market, rental values this year are likely to continue on an upward trajectory.
With the average purchase price of a house in London now over £500,000, many purchasers of family homes are now liable to pay 10% or 12% Stamp Duty rate.
They have calculated that they can rent for years, often in better neighbourhoods than those where they could afford to buy, for the sum they would pay in Stamp Duty alone.
Marc von Grundherr, lettings director of Benham & Reeves Residential Lettings, said: “George Osborne has done more for the rental market than any other Chancellor in history.
“Thanks to the changes in Stamp Duty rates, he has made renting long term a more attractive option for many tenants.
“Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own, and renting becomes a no brainer.
“We are advising landlords who are already in the market to hang on to the properties, and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief.
“Many nervous investors will leave the market and when they do, supply will be limited even further.
“The rent increases that will inevitably result will more than mitigate landlords’ extra costs.”
* Separately, Martin & Co boss Ian Wilson has said that while the Chancellor’s tax changes will hurt investors, the “fundamental drivers” remain in place for the expansion of the private rented sector.
He made the remark in an interim trading statement to the City, which reported group revenues up 38% last year, to stand at £7.1m.
The bottom line remains the same there will be a shortage of social housing (outside NW3 and the rest of the south east bubble). it does not bode well for the future.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The market is staggering along on the back of unintended consequences. The chancellor hasn’t deliberately helped the lettings industry in any way. What he has done is make buying so unattractive that lettings looks attractive in comparison. He has also in a cack handed supposed attempt to make the market more of a level playing field penalised UK landlords. I would like to think that this was a firmly tongue in cheek comment from Marc von Grundherr
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
In short………….. what twoddle, the only person Osborne ever helped was Osborne. Even my tenants were horrified by his actions as they can see what will happen next. Hard working people outside of the big Cities do not earn enough to rent or even consider buying and they certainly can’t ‘Flip’ houses to make the odd million when it suits !!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register