12 May 2022
The UK government should try and increase the supply of much-needed housing stock in the private rental sector by scrapping the 3% stamp duty surcharge for buy-to-let owners buying additional properties, according to the National Residential Landlords Association (NRLA). The organisation has once again argued that dropping the surcharge would boost housing market activity “by encouraging investors to return to the market and invest in properties and that would in turn help meet the rising demand for rental homes and drive up transaction levels.” As reported by leading industry publication, Property Eye, “mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit landlords’ profits in recent.” This could explain why many people have left the Buy-To–Let market and therefore slashed the supply of private rented properties. The government’s tax changes have not “just pushed a number of BTL landlords out” of the sector, but have also left “prospective tenants in some parts of the country with little alternative but to bid against each other, pushing rents up in the process, as a result of falling housing supply,” it reports. According to Capital Economics, removing the stamp duty surcharge would see almost 900,000 new private rented homes made available across the UK over the next 10 years.
The Queen’s Speech, a major constitutional act in the UK, delivered on 10 May by Prince Charles for the first time as he increasingly stands in for Her Majesty, outlined the government’s plans for the next parliamentary session. The key announcement impacting the rental market was that Section 21 evictions will be dropped as part of rental market reform. The government says scrapping Section 21 evictions will strengthen renters’ rights, while giving landlords greater powers to tackle anti-social tenants or those in serious rent arrears. Landlords’ grounds for possession will also be reformed. It’s previously been rumoured that this would involve strengthening Section 8 of the Housing Act. The Queen’s Speech also said that a new ombudsman for private landlords will aim to make sure that disputes can be resolved without going to court.