An additional 3 per cent stamp duty on acquisition may well temper some landlords’ appetite for future investment, but this is unlikely to cause them to liquidate their assets. The limitation of tax relief for interest payments will put pressure on landlords who are highly geared or with poor performing assets. This said, our analysis indicates that only 31 per cent of private rented housing stock is subject to a buy-to-let mortgage. The average loan on that is 54 per cent of the value property it is secured against. Some landlords will rationalise their portfolios and some will exit the sector, but do not expect a deluge of stock to hit the market.
So while there are undoubtedly pressures on the UK housing market, the conspiracy theorists are likely to have to wait for their day in the sun, even if challenges will remain for those looking to get on or trade up the housing ladder.
Lucian Cook is head of Savills UK residential research
Key Points
Even though we sometimes treat the UK housing market as a single entity, what we have is a multidimensional market.
The Bank of England has put in place measures to ensure that borrowers do not stretch themselves too far while rates are low.
An additional 3 per cent stamp duty on acquisition may well temper some landlords’ appetite for future investment.
