Up to half-a-million buy-to-let properties could be put on the market
Friday 05 February 2016
Pressure is being piled onto the Government to reverse its housing policies after experts predicted that up to half-a-million buy-to-let properties could be dumped onto the market in the next year, deepening the housing crisis.
The National Landlords Association (NLA) released figures that suggest major concerns over the proposed hike in stamp duty for second-homeowners could lead to many putting their houses and flats on the market.
Worryingly, the statistics show the number of landlords looking to sell has more than doubled since July last year, from 7 per cent to 19 per cent, and that confidence has tumbled further than that seen during the financial crash in 2007.
And with confidence in the sector taking a nosedive, the NLA suggests the number of buy-to-rent properties put back on the market looks certain to snowball, predicting that 100,000 homes could be sold each year up to 2021.
Osborne housing reforms will not just hit small-scale landlords
It's a direct result of Chancellor George Osborne's unpopular proposals, which first included the removal of landlords' mortgage interest tax relief, followed by a 3 per cent rise in stamp duty which is expected to come into force from April.
Richard Lambert, chief executive of the NLA, said: "Up to half a million properties could come onto the market as a result, which the Chancellor will no doubt deem a success.
"But there is no guarantee that these will be the one or two-bedroom flats or small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.
"We've always said that Mr Osborne is blinded to the impact of his decisions by his commitment to homeownership.
"He may have intended to focus on the small-scale part-time investor, but it's the larger and more professional landlords who will be hit worst by cuts to mortgage tax relief and increases to stamp duty, and who appear most likely to leave the sector.
"What happens to the people these landlords house if they still can't buy and there are fewer and fewer properties available to rent?"
Government under pressure over housing policy
Already under fire from landlords since the hike was announced during the Autumn Statement, the latest statistics from the NLA have led to greater pressure on the Government to make a u-turn on the unpopular move.
Despite Osborne's attempts to justify the move by claiming it would create 'level playing field' for the property market, it has even attracted criticism from his own party.
Fellow Conservative peer, Lord Howard Flight, recently warned it could lead to house prices plummeting or even a crash in the market.
Lord Flight has now called for a re-think of the policies.
Meanwhile, Cherie Blair - wife of former Prime Minister Tony Blair - has offered her support to property investors hoping to fund a judicial review to overturn the scrapping of the current mortgage interest tax relief available to landlords.
More than £50,000 was raised in the space of a week by the investors, which demonstrates the strength of feeling in the buy-to-let sector.
Mrs Blair's law firm, Omnia, says the plans discriminate against landlords by denying them the ability to offset their financial costs, and argues this inconsistency is in breach of article 1 of the European Convention on Human Rights.
What is abundantly clear is that the Chancellor's plans are not going to be implemented without a fight, and if support against the proposals continues to grow then there is every hope that the Government will be forced to back down.
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