New stamp duty charge will drive up rents states ARLA
The Association of Residential Letting Agents (ARLA) claims rents will increase due to the new extra 3% stamp duty increase on buy-to-let properties which comes into effect on the 1st April.
52% of ARLA members have confirmed an increase in activity from Landlords interested in investing in property before the 1st April. However most believe this will drop after the 1st April. 57% of agents also agree this will then lead to an increase in rents due to a lack of supply of rental properties as landlords pull out the market.
“The stamp duty changes are now imminent, and as well as hitting small landlord’s, 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” says David Cox, managing director of ARLA.
“We are concerned that the government rhetoric of wanting to help people onto the housing ladder does not tally with their action of continuing to target the rental market with additional costs. Some landlords will simply withdraw from the market whereas others who can take the hit of the extra stamp duty will simply raise rents” says Cox.