“A host of big property companies have “serious concerns” about his plans, which many think will benefit the already well-off while hitting the country’s poorest. One property agent says the Chancellor is “abandoning the millions of people who rent in this country.”
Rocketing house prices, caused in part by a shortage of supply, have led to the level of home ownership in the UK falling to its lowest level in almost 3 decades.
You might think Osborne’s idea to build more cheap houses is the obvious solution. Home ownership is a classic Tory policy. But observers say what’s needed is a holistic approach to address the systemic problems in the market — a lack of supply of both private and rental properties where they’re needed.
Not only has Osborne done nothing to encourage growth in the rental sector, another one of Osborne’s policies could actually make the problem of spiralling rents even worse.
Alongside the pledge to build 400,000 new homes affordable homes for purchase, Osborne also hiked Stamp Duty — the tax charged on completed property transactions — for buy-to-let properties and second homes. The tax was hiked by a huge 3%.
There are concerns that the tax hike could lead to a restriction of supply for rental properties, as the price rise puts off potential would-be buyers. That in turn could drive up rents, as supply fails to keep pace with demand.”
Of course, it is the institutional and property-heavy buy-to-let landlords who are shouting, but the problem hits all renters.
What of those people who have to rent – not only those who cannot afford a mortgage even with all the schemes coming out every day to encourage them? The renters whose jobs mean they move often and can’t wait to sell a house. Those who cannot get a deposit together? Most end up paying more in rent than they would for a mortgage. Now rents will rise even further to reflect increased costs of purchasing buy-to-let mortgages. …”