Chancellor Jeremy Hunt has officially said that he and the Treasury want to see more landlords selling up their properties and leaving the sector.
In the budget on Wednesday 6th March, Chancellor Jeremy Hunt:
- cut the higher rate of Capital Gains Tax from 28% to 24% - The government said this will encourage landlords and second homeowners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder.
- abolished the Furnished Holiday Lettings tax regime which gives extra tax reliefs for costs incurred furnishing holiday lets that aren’t available to private rentals, in a bid to remove the incentive for landlords to offer short-term holiday lets rather than longer-term homes.
- Abolished multiple dwellings relief, explaining that this stamp duty relief for those who buy more than one property in a single transaction, although intended to support investment in the PRS, had not been found to do so and was being regularly abused.
Commenting on this, Sherrelle Collman, Managing Director of Caridon Landlord Solutions said:
“Once again, Chancellor Jeremy Hunt's budget decisions have missed the mark when it comes to revitalizing long-term investment in quality rented homes. Instead of addressing the pressing issues facing landlords, tenants, and the private rented sector (PRS) as a whole, the Chancellor has opted for short-sighted measures that further squeeze landlords and restrict supply for tenants.
“The reduction in the higher rate of Capital Gains Tax (CGT) and the abolition of tax reliefs for Furnished Holiday Lettings and multiple dwellings relief are yet further blows to landlords already grappling with numerous challenges. These changes not only fail to address the fundamental issues driving the housing crisis but also risk pushing more landlords out of the market, exacerbating the shortage of long-term rental properties.
“While the government claims these measures will encourage property sales and benefit prospective homeowners, they overlook the dire consequences for tenants. With an average of 23 tenants competing for each available property in London, and social housing waiting lists reaching 1.3 million, the urgent need for comprehensive housing reform cannot be ignored.
“Moreover, the uncertainty surrounding housing benefits only adds to the plight of vulnerable tenants. Instead of providing clarity and support, the budget offers a deafening silence on this critical issue.
“In a landscape where first-time buyers are struggling and households are languishing in temporary accommodation, the budget should have prioritised initiatives to tackle the housing crisis head-on. Yet, what we received was a missed opportunity to make housing provision a top priority.