A new report has warned that the increase in stamp duty, changes to buy-to-let mortgage tax relief and the Bank of England’s new rules for mortgage lenders will have major consequences for the UK rental sector. Political communications and tax policy experts The Whitehouse Consultancy said that the 3% hike in stamp duty on second […]
A new report has warned that the increase in stamp duty, changes to buy-to-let mortgage tax relief and the Bank of England’s new rules for mortgage lenders will have major consequences for the UK rental sector.
Political communications and tax policy experts The Whitehouse Consultancy said that the 3% hike in stamp duty on second homes and a reduction in tax relief available on mortgage interest payments will “significantly limit” buy-to-let investment, inhibit labour mobility and reduce economic activity.
The Treasury Select Committee has already questioned the changes, claiming they would be a deterrent to investment in this sector, and with it “act as an enduring constraint on the supply of privately rented properties”.
In its insight paper, Keeping alive the private rented sector, Whitehouse warns that the Finance Bill, currently going through the House of Commons presents the last political opportunity for the housing industry to call on the government to officially review the impact of the stamp duty surcharge and introduce a new tax efficient means for landlords to restructure their portfolios.
The 3% stamp duty increase, which came into effect on 1 April, is part of the government’s attempt to curb the buy-to-let market and free up property for first-time buyers. The basic rate of tax relief landlords can claim on properties is also set to fall to 20% from April 2017.
Helen Munro, managing director of The Whitehouse Consultancy, said: “The government’s proposals will have a fundamental impact on the housing sector, and businesses need to understand the implications of the new legislation.
“The window of opportunity for the industry to engage with the government on these measures is closing, and smart industry leaders should be considering how to engage with MPs and the Finance Bill before it’s too late.”
