Landbay | Will the Budget’s Stamp Duty rise affect the buy-to-let market?

It’s a challenging time for landlords, with the recent Budget presenting notable hurdles for landlords and brokers.

Our latest landlord survey highlights disappointment, with 72% of landlords expressing dismay over the Budget. A key concern for many is the increase in stamp duty on second homes and investment properties. Nearly 40% of landlords indicated that this change would discourage them from expanding their rental portfolios. For some, the measure compounded frustrations following restrictive tax policies introduced by the previous Government.

The survey revealed that landlords with portfolios of four to ten properties were most affected, with 38% stating that the increased stamp duty would significantly impact them. Regionally, landlords from London and the South East comprised the largest group (38%) to say it would affect them “a lot.”

With additional measures on the horizon, such as the Renters’ Rights Bill, it’s understandable that landlords are feeling anxious. However, there are reasons to remain optimistic. Despite current uncertainties, tenant demand remains strong and shows no sign of diminishing.

Affordability challenges continue to impact residential buyers while rental demand outpaces supply. Consequently, there is no shortage of tenants ready to rent, and rental yields remain robust. Brokers are stepping up to support landlords, offering tailored solutions that address their evolving needs. Our product range reflects this commitment, helping brokers meet the diverse demands of their clients.

While only 6% of landlords felt optimistic about the Budget, others took a longer-term view. Thirty per cent of respondents said the stamp duty rise would have minimal impact, prompting only slight adjustments to their plans. Some landlords were unfazed, viewing the 2% increase as relatively insignificant.

One landlord shared: “I feel positive because this has been my approach to property investment over the past forty years. For me, it’s a long-term investment, and I am not focused on short-term gains. While government policies can be disappointing for some, my buy-to-let finances are sound, and I can weather these changes.”

This pragmatic, long-term perspective is undoubtedly sensible. The buy-to-let sector has proven its resilience, having withstood numerous challenges, changing governments, and economic crises over the years. Despite turbulent times, it continues to thrive.

However, our survey also suggests that many landlords feel undervalued by the Government, with one landlord noting: “There is a chronic shortage of rental properties. The stamp duty rise feels like taxing a doctor extra for curing a patient.”

This sentiment reflects a broader feeling of ‘landlord bashing’. Given the ongoing housing crisis, the market must maintain good landlords. Whether the new Government can meet its ambitious housebuilding targets remains uncertain, but one thing is clear: addressing the housing crisis will take time. The buy-to-let sector must be allowed to play its crucial role in supporting the UK housing market by providing much-needed accommodation.

To safeguard the sector, the Government must work to restore confidence, ease concerns, and reassure landlords that their contribution is valued.

As a dedicated buy-to-let lender, we remain committed to supporting landlords, innovating our products to meet their needs and helping them navigate these evolving challenges.