Budget 2024: 5% stamp duty hike will hit supply of homes to rent
Landlords will need to pay a stamp duty levy of 5% when purchasing additional properties, a move the NRLA believes will only exacerbate the housing supply crisis.
Rachael Reeves announced the move - and increase of the current 3% charge in today’s Budget, with the change to come in immediately.
The NRLA has hit out at the plans – which is says could see a loss of half a million homes from the rental market over the next 10 years.
NRLA chief executive Ben Beadle said: “Hiking stamp duty on homes to rent when 21 people are chasing every rental property makes no sense.
“Analysis by Capital Economics has found that increasing Stamp Duty on rental properties from three to five per cent will see a net loss of half a million homes to rent over 10 years.
“This will not help the huge number of tenants for whom homeownership is still a distant dream.
“The Chancellor has failed to heed the warnings of the Institute for Fiscal Studies that higher taxes on the rental market lead only to rents going up.
“What tenants needed was a Budget to boost the supply of new, high-quality rental housing. What we got is a recipe for less choice and higher rents.”
Housing benefit rates frozen
The association was also disappointed by confirmation from the Work and Pensions Secretary that housing benefit rates will be frozen from next year.
NRLA Policy Director Chris Norris said:Whilst the Budget spoke about protecting vulnerable people it failed to confirm what we now know that housing benefit rates will be frozen next year.
"It makes no sense whatsoever to provide support for housing costs that bear no resemblance to rents as they actually are.
"Coupled with tax hikes on the supply of homes to rent, announcements today will make it hardest of all for those claiming benefits to access and sustain tenancies in the rented sector.”
Capital Gains Tax
Elsewhere in the budget increases to Capital Gains Tax were announced, however rates on residential property have been frozen at current levels.
The chancellor also confirmed plans that will allow local authorities to retain the full receipts of right to buy schemes to reinvest in new housing.
She also revealed proposals to hire ‘hundreds’ of new planning officers ‘to get Britain building again’ and plans to invest £1 billion in removing dangerous cladding next year.
Member webinar
The NRLA team will be hosting an exclusive member webinar on Friday (1 November), offering you an in-depth analysis of all the key announcements and how they are likely to affect your business and the wider sector.
The event, ‘What the Budget means for the private rented sector’ will be hosted by the NRLA’s policy and campaigns team, with Sheena Parker from St James's Place joining the webinar as a guest speaker.
The webinar will run from 12pm-12.45pm and will be held on Zoom.
To reserve your place click here, and if you would like to ask a question, please submit it in advance by emailing the campaigns and public affairs team at [email protected].
