Calls have been made to bring about changes for landlords and the buy-to-let market.
Many are hoping the ideas will be announced by the Chancellor in the Budget next Monday.
One idea put forward is to make it cheaper for landlords to sell homes to tenants, with the think tank Onward proposing a capital gains tax break.
This could provide landlords with a windfall and tenants with a significant contribution towards their deposit.
Tenants would have to have been living in their property for at least three years to qualify.
However, not everyone welcomed the suggestion, with Rob Dix of The Property Hub, saying the policy ‘makes no sense’.
“It would benefit a tiny number of tenants ... based on eligible households both wanting to buy the house they currently live in, and being able to afford the remainder of the deposit and mortgage,” he said.
“In short, it’s a policy that sounds good on the face of it and might win a few votes, but falls apart if you think about it for more than 30 seconds.”
The Residential Landlords Association is saying the move would ‘choke off’ the supply of rental properties, leaving many young people stranded.
Instead, it called for the Chancellor to use the Budget to scrap the Stamp Duty surcharge of three per cent on additional properties, which was originally introduced to discourage landlords from buying more properties that could go to first-time buyers.
However, the Stamp Duty changes have been clogging up the property market - particularly at the top end - as buyers don't want to buy homes that come with a massive tax bill.
Mark Readings from estate agent House Network agreed that the increased Stamp Duty was a significant factor in the current downturn in the housing market in London and the South East.
He said: “The government needs to support and stimulate the property market, not only for first-time buyers but for those existing landlords and international investors.”
Separately, there have also been calls in the past for tax incentives for landlords offering longer-term tenancies.
Tax relief for landlords is already being tapered down and will eventually be replaced with a 20 per cent tax credit by 2020.
Mr Readings concluded that whatever the government announces next week, it needs to help landlords or they'll begin to look elsewhere to invest.
He said: “The property market is largely dominated by economy sentiment and, as recent political uncertainty has decreased this confidence, the government needs to take measures in the Budget to prevent any further uncertainty.
“The major cities have been the hardest hit so many investors will seek alternative locations if the government continues to make properties less appealing for international and UK landlords.”
What are you hoping will be in this year's Autumn Budget? Let us know in the comments.
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22 June 2020 • 9-minute read
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