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George Osborne ‘has done more than any other Chancellor’ to help lettings industry
Original Author: Rosalind Renshaw
A London agent has said George Osborne has done more than any other Chancellor in history to help the lettings industry.
The comment, by Benham & Reeves Residential Lettings, comes after Osborne has effectively declared war on private landlords by introducing a 3% Stamp Duty surcharge and changing the rules on tax relief.
However, the agent says that in London, much higher rates of Stamp Duty Land Tax are turning home hunters – including families looking for ‘modest homes’ – away from purchasing in favour of renting.
The firm says that with demand continuing to rise and the anticipated exit of amateur landlords from the market, rental values this year are likely to continue on an upward trajectory.
With the average purchase price of a house in London now over £500,000, many purchasers of family homes are now liable to pay 10% or 12% Stamp Duty rate.
They have calculated that they can rent for years, often in better neighbourhoods than those where they could afford to buy, for the sum they would pay in Stamp Duty alone.
Marc von Grundherr, lettings director of Benham & Reeves Residential Lettings, said: “George Osborne has done more for the rental market than any other Chancellor in history.
“Thanks to the changes in Stamp Duty rates, he has made renting long term a more attractive option for many tenants.
“Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own, and renting becomes a no brainer.
“We are advising landlords who are already in the market to hang on to the properties, and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief.
“Many nervous investors will leave the market and when they do, supply will be limited even further.
“The rent increases that will inevitably result will more than mitigate landlords’ extra costs.”
* Separately, Martin & Co boss Ian Wilson has said that while the Chancellor’s tax changes will hurt investors, the “fundamental drivers” remain in place for the expansion of the private rented sector.
He made the remark in an interim trading statement to the City, which reported group revenues up 38% last year, to stand at £7.1m.
