Is rent being driven to record highs by stamp duty changes?

Is rent being driven to record highs by stamp duty changes?

According to Benham & Reeves Residential Lettings, collated rental value figures for 2015 clearly demonstrate that rental values have climbed to record highs across almost every borough.

Thanks to the changes in stamp duty, fluid job markets and the way many overseas professionals are taxed in the UK, renting has become a much more attractive option.  With demand continuing to rise and the anticipated exit of amateur landlords from the market, rental values in 2016 are likely to continue on this upward trajectory.

Virtually every borough in zones 1 and 2 saw rental values increase by more than 4% year on year.  In fact, only Richmond-upon-Thames and a small area around Edgware Road in central London saw rents fall.  Rental values became slightly more modest the further away from the city centre with even outlying boroughs such as Barnet and Ilford seeing significant growth.  Hackney was the clear winner with a staggering 33% increase in rental values over the past year although Bow, Bethnal Green and Haringey all experienced double digit growth, as well.

As the British economy has emerged from recession and tenants have finally moved to bigger accommodation in line with increasing household income, the rental market has benefitted.  The most significant change, however, has been the changes to stamp duty which have affected London more than any other area of the country.  With the average of a house in London now standing at over £500,000, many family homes are now liable for the 10% stamp duty rate with many modest family homes even incurring the 12% stamp duty rate.  Many tenants have calculated that they can rent for years, often in better neighbourhoods than those in which they could afford to buy, for the sum they'd pay in stamp duty alone.


Marc von Grundherr comments: “George Osborne has done more for the rental market than any other chancellor in history,” , Lettings Director of Benham & Reeves Residential Lettings, “Thanks to the changes in stamp duty rates, he has made renting long term a more attractive option for many tenants.  Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own and renting becomes a no brainer.

We are advising landlords who are already in the market are advised to hang onto the properties, and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief. Many nervous investors will leave the market and when they do, supply will be limited even further. The rent increases that will inevitably result will more than mitigate landlords' extra costs.”

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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NathanGreen
NathanGreen 16 Jun 2016

Seeing that the tenants are quite satisfied with their landlords and the properties is indeed great. I wonder, though, what is the situation in London alone? The tenants face sky-high rent levels in the...

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AndiMur
AndiMur 15 Jun 2016

TheGuardian published the same forecast. But on the other hand, professional brokers express different opinions. According totranio.com, an exit from the EU would not affect the demand/supply imbalance...

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Gary Holmes
Gary Holmes 14 Jun 2016

Having a professionally completed inventory at check-in and check-out is clearly (to me at least) of minor value. Tenants make un-authorised modifications and/or walk off with items that belong to the

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Violet Gibson
Violet Gibson 14 Jun 2016

Cautious people think buying off-plan is reckless, but over the past few years investors have literally made fortunes.Pre-release prices have obvious benefits for the developer, who gets instant finance...

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Kate Windleton
Kate Windleton 14 Jun 2016

An interesting research indeed. I guess that is in complete contrast with the United States where people often move from one coast to another. It will be interesting to hear the trends for people moving...

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NathanGreen
NathanGreen 14 Jun 2016

I think it all depends on the market conditions and how well your company is doing. You will agree that you can't demand more when you're killing yourself just to hang in there. Sometimes you need all

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ChristinaReedUK
ChristinaReedUK 13 Jun 2016

What does "detecting a bad vibe" mean actually. I've had certain vibes like these and yet have always found a reason , if there's any, why I don't like a certain property. The property maintenance might...

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keybanks estates
keybanks estates 08 Jun 2016

Great News for first time buyers, about time two!

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NathanGreen
NathanGreen 07 Jun 2016

I agree with #6 - you should maintain your garden according to the target buyer. One thing is universal, though - cleanliness and order. Having the yard clutter-free and clean will help people who do enjoy...

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NathanGreen
NathanGreen 06 Jun 2016

I will always say that London is overrated. Sure it is the capital, but it's too stuffed in there. It's more of a business city to me.

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Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

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