Stamp duty rush curbs growth in rents

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Rent rises have been curbed by landlords rushing to complete before increased stamp duty rates took effect this month, says Countrywide.

The average UK rent rose 3.4 per cent year-on-year to £931 in March, compared with 4.5 per cent in the same month last year.

Countrywide estimates that £28bn worth of home sales completed last month, which is a 76 per cent increase year-on-year.

Landlords accounted for 23 per cent of homes sold in March, up from 13 per cent on the same month last year.

Further, Countrywide says landlords accounted for half of all homes sold in the two weeks running up to 1 April, when a 3 percentage point stamp duty surcharge kicked in for landlords.

Countrywide research director Johnny Morris says: “Quite at odds with the intentions of the policy, the first measurable effect of the introduction of the new stamp duty rate has been to increase the number of homes owned by landlords, although this will likely be a temporary affect as we see reduced investor activity in future months.

“The increase in supply of homes to rent from landlords bringing forward purchases seems to have taken the edge off rental growth. A similar increase in tenants looking for a home to rent though would indicate this may not persist. The large number of sharers, and people living with parents means there is a big store of pent up demand in the rental market.”