Home » Uncategorised »
Stamp Duty surcharge already cooling market
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The increase in Stamp Duty surcharge has already began to cut new properties coming onto the market, according to new research.
New rental properties listed by buy-to-let landlords in May were down by 5.7% on levels seen in March, the study from property crowdfunding platform Property Partner shows.
Stamp Duty slowdown
Following the rush of landlords putting new properties onto the market before the Stamp Duty deadline of April 1st, there was an unsurprising lull in listings, down by 15.4%.
In addition, new listings dropped so heavily in some areas, they fell below levels seen in March, before the additional 3% surcharge came into force.
During May, new rental property listings slipped in 91% of towns and cities in the UK. Worcester saw the largest fall in rental supply of 42.6%. This followed a 48.9% surge in new listings during April. Other main areas in terms of drops were Bedford and Derby, with falls in new rental listings of 41.7% and 41% respectively.
The table below indicates the towns and cities which saw the largest falls in new property listings during May:
| Town/City | Region | % drop in new rental property listings |
| Worcester | West Midlands | -42.6 |
| Bedford | South East | -41.7 |
| Derby | East Midlands | -41 |
| Poole | South West | -39.6 |
| Gloucester | South West | -37.1 |
| Swindon | South West | -31.7 |
| Chelmsford | East | -31.3 |
| Solihull | West Midlands | -29.9 |
| Bournemouth | South West | -29.8 |
| Rotherham | North East | -29.5 |
Stamp Duty surcharge already cooling market
Temporary highs
Dan Gandesha, CEO of Property Partner, stated, ‘As anticipated, the rush of investors buying before April’s stamp duty hike caused a temporary spike in rental supply, which now seems to have been swiftly reversed. New rental listings in May were down almost 6% on March, before the surcharge spike. With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants.’[1]
‘It’s likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants. A lack of available properties would also force more tenants into accepting poorer quality accommodation, particularly in areas with an acute shortage of stock. June’s figures will show whether this is just a market adjustment, or something more fundamental. It’s unfortunate timing with the EU referendum just two weeks away,’ Gandesha continued.[1]
Concluding, Gandesha noted, ‘April’s Stamp Duty changes are just the first in a series of additional costs being piled on traditional buy-to-let. In the longer term, the private rented sector must be professionalised, to provide Generation Rent with enough quality homes at rents they can afford.’[1]
[1] http://www.propertyreporter.co.uk/landlords/rental-supply-dr0ps-57-after-stamp-duty-hike.html
