According to the Association of Residential Letting Agents (ARLA) there will be a reduced supply of rental housing and higher rents after the April tax hike for buy-to-let investors. The latest English Housing Survey shows there were 4.3 million households renting privately in England, very nearly 20% all households, in 2014-15.
An ARLA survey of its members has found that 63% expect rental supply to drop after April as fewer buy-to-let investors enter the market, deterred by the higher stamp duty and the other recent tax increases on landlords. In addition 57% thought that the tax rises will lead to higher rents.
David Cox, managing director of ARLA has said: “The stamp duty changes are now imminent, and as well as hitting small landlords, they will also impact institutional investors.
“Although members are reporting a rush from landlords trying to snap up their buy-to-let investments now, it’s likely that we’ll see the buy-to-let market drop like a stone come April and probably not pick up again until next year. This will most certainly cause rents to increase, with supply dropping, as competition for the limited availability of properties intensifies.”
Mr Osborne, following stated Conservative policy, is aiming to increase home ownership, but given the housing shortage in some areas of the country, it is thought that very likely his tax measures will lead directly to a rise in house prices and rents, making it even harder for first-time buyers (FTB) to buy.
The government, it would seem, is putting its faith in a number of schemes designed to help first-time buyers. These include the “Help to Buy” scheme, which makes mortgages cheaper and easier to access, a shared ownership scheme, which allows buyers to part-own, part-rent a home, and a starter homes scheme, which offers discounted homes to under-40s first-time buyers.
Article courtesy of LandlordZONE
