Investigating the question of whether the Budget has been unfairly harsh towards landlords
News Article: Decline in UK Rental Properties Following 2021 Autumn Budget
A significant reduction in the number of rental properties in the UK private rented sector (PRS) has been observed since the 2021 Autumn Budget, with approximately 290,000 homes leaving the market. This trend is largely attributed to the regulatory and tax environment introduced around that time, which disproportionately affected small individual landlords [1][3][4].
The Budget, which confirmed a hike in capital gains tax, sparked fears that the decision would drive landlords from the sector. However, the exodus of buy-to-let landlords from the sector has been somewhat exaggerated, according to the CEO of Lomond, a leading group of Lettings and Sales Agents across the UK [5].
The research conducted by Lomond revealed that in the two weeks following the Budget, there was a marginal decline of -0.6% in the number of properties listed for sale across England with a tenant in situ. This decline varies across different regions, with the Northeast experiencing a notable reduction of -1.9%, the Southwest a notable reduction of -2.5%, and the West of England an 0.8% increase [2].
Conversely, the East Midlands has seen a 1.4% increase in tenanted for sale stock in the last two weeks. The reduction in rental stock listings climbs as high as 3% in the East of England [2].
The buy-to-let landscape is expected to remain positive now that the budget dust has settled, as the vast majority of buy-to-let landlords continue to see the rental sector as a secure and consistent avenue of investment [6].
The decline in rental properties has led to a growing need for alternative sources of rental stock. The build-to-rent (BtR) market is emerging as a critical alternative to replace lost rental stock, but new supply growth is not yet sufficient to fully compensate for these losses [1][3].
Government policy and local planning support are recommended to encourage BtR developments and prevent escalating rents caused by shrinking rental supply.
In conclusion, while the 2021 Autumn Budget itself is not singled out as the sole cause, the cumulative impact of budget-related tax and regulatory measures around that time has contributed to landlords exiting the rental market, resulting in a significant decline in rental properties in the UK since 2021 [1][3][4].
Here are two sentences that contain the words 'finance', 'investing', 'business', 'real-estate' in the context of the given text:
- Businesses in the real-estate sector, particularly small individual landlords, are concerned about the financial implications of the regulatory and tax environment introduced by the 2021 Autumn Budget, as it has disproportionately affected them and driven some to exit the rental market.
- The build-to-rent (BtR) market, as an alternative business model in the real-estate sector, is being encouraged by government policy and local planning support to invest in new developments and alleviate the decline in rental properties caused by the exit of buy-to-let landlords.
