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Buy to Let

Landlord Stamp Duty hike will stall rental market

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
23/03/2016

Letting agents believe rent will go up as a result of the 3% premium on Stamp Duty

The new Stamp Duty reforms for buy-to-let properties could put the brakes on the rental market, according to the Association of Residential Letting Agents (ARLA).

It said that the change, which comes into effect on 1st April, will increase rent costs for tenants and trigger a decline in the supply of available properties.

Two thirds (63 per cent) of agents predict that supply will fall as landlords are pushed out of the market. And six in 10 ARLA members agree rents will be pushed up once the Stamp Duty reforms have come into effect, as increased costs for landlords are passed through to tenants. The figure rises to three-quarters of letting agents in London.

David Cox, managing director of the Association of Residential Letting Agents, 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.”