The managing director of the Association of Residential Letting Agents says urgent action is necessary “to make the prospect of being a buy to let landlord appealing again” - and if that does not happen, the vicious cycle of high demand and low supply will continue.
David Cox says the introduction of increased stamp duty on additional properties will see “supply nose-dive, demand sky-rocket and rent prices go through the roof” and is the latest measure to - in his words - “push the private rental sector into a state of despair.”
He says it was bad enough when Chancellor George Osborne initially applied the stamp duty surcharge only to small-scale landlords when it was first announced in the Autumn Statement last November. Now it has been extended to large scale landlords too - “an even bigger blow” claims Cox.
“Professional landlords, who normally own more than 15 properties, are crucial for providing the market with rental stock, and as a result of the rising costs involved, we are very likely to see the new tax discouraging landlords from investing in buy to let properties, which will of course mean supply falls” he says.
“In order for landlords to be able to afford to own a BTL property, tenants will begin to see the additional costs passed onto them, which means they could see less money spent on maintaining their property, and also an increase in rent costs” he adds.
He says yesterday’s Bank of England proposal to introduce stricter affordability measures for BTL investors is “disappointing.”