The Telegraph has reported this week that the collapse of the buy-to-let market was met at the hands of the stamp duty hike that came into effect earlier this year. An article on the website of the news provider highlighted the results of new research which has revealed the scope of drop in buy-to-let purchases in the year that the government had increased the stamp duty by 3% on transactions in this market.
Figures provided by the estate agency Haart disclose the extent of the decrease, with the number of properties sold to but-to let investors falling to 63.7% in the year to November 2016 in England and Wales, dropping 8.2% last month alone. In the capital, London, the number of such properties of such properties sold fell by 40%. The estate agency also reported that the number of landlords registering to purchase properties is down by 59.2% annually. Just before the stamp duty hike, there was a surge on transactions in March, which was then shortly followed by a sharp decline in April.
Paul Smith, the chief executive of Haart, commented: ”The scale of decline in buy-to-let in just 12 months is deeply worrying – landlords have clearly pulled out of the market and are unlikely to return any time soon.” This has played a significant part in worsening the housing crisis, as well as the immeasurably short lack of supply against demand in affordable housing. Smith has voiced his opinion against the government’s implementation of the stamp duty increase, accusing them as being ”pantomime villains” and calling on them to end the ”war on landlords” in the property market. He went on to say: ”Tenants are stuck in an intensely competitive market where rents are often more expensive than mortgages, because there are simply not enough properties available for lettings, and many landlords now have no choice but to pass the extra costs on to tenants.” But-to-let landlords have seemed to be an easy target during the recent economic downturn, as the suffer the worst outlook than anyone else in the housing crisis.
The article also notes that activity in the owner-occupier market had fell as well, with 21.3% less buyer registrations in the last year, and 30.9% fewer first time buyers. Research also brought to attention the number of new tenants seeking a home dropping by 5.2% compared to the previous year, pushing down average rents in the UK.
Ever since the stamp duty increased came into force earlier this year, the buy-to-let sector has had a full-frontal attack when it came to landlords purchasing properties. For some, this attack on buy-to-let has meant that any signs of a revival in the sector is looking less than likely, and it doesn’t seem to be having a great outlook for the future.