Autumn Budget Misses Mark on Housing Reform: UK Rental Market Squeezed by Shortages and Rising Rents

The UK rental market faces mounting pressures, with a recent Rics survey revealing a critical shortage of properties and surging rent prices. Landlord instructions, a key indicator of properties available to rent, fell to a net balance of -29%, marking this the lowest level since 2021. Strong tenant demand is driving rents higher, with 33% of surveyors expecting further increases. While some banks have eased mortgage rates, renters continue to feel the strain, as new tenancy rents now consume 30% of household income. David Hannah, Group Chairman of Cornerstone Tax, highlights the implications of recent tax reforms, pointing to the government’s Autumn Budget as a missed opportunity to support the housing market. The Budget’s 2% rise in the second home surcharge, coupled with recent stamp duty hikes for landlords, has further constrained rental stock, exacerbating tenant affordability challenges

Annual rent growth peaked at 9.2% in March, the highest rate since records began in 2015, before slightly easing to 8.4% in September, according to official figures. Data from PriceHubble, published by the Office for National Statistics in October also highlights that rent on new tenancies costs renters 30% of their gross income, the highest share recorded since 2017. Meanwhile, house prices continue to climb, supported by expanding buyer demand for four consecutive months, signalling strong interest in homeownership despite difficulties in the rental sector.

David argues the Chancellor’s latest step will discourage second home ownership, aiming to create more opportunities for prospective homeowners. Another stamp duty change from the Labour government – the end of the temporary nil rate increase in April – is expected to drive a surge in transactions in early 2025, as buyers rush to complete purchases before the new tax rate takes effect, followed by a predicted slowdown in activity.

David Hannah, Group Chairman of Cornerstone Tax, comments:

“The decision from the government to lower stamp duty bands shows a concerning deficit of joined-up thinking. Does this Chancellor and Prime Minister not understand that if they want 1.5 million new homes, they cannot drive landlords out of the market, incur additional charges for first-time buyers and freeze up working capital for developers – which can only be available if these homes are selling. I expect stamp duty receipts to fall significantly, then to flatline in Q1 2025, potentially plunging the British property market into a desperate situation. In essence, reducing stamp duty thresholds means that it will ultimately be the consumers who foot the bill.

“Furthermore, it would make sense for the new Government to suspend, or even abolish, the 3% surcharge where properties are being acquired for private rental sector investment. Removing this measure would encourage landlords to increase their holdings, rather than exit the market – reversing the decline in supply of rental homes and potentially expand it to the point where demand no longer outstrips supply.”

EAN Content

Content shared by this account is either news shared free by third parties or sponsored (paid for) content from third parties. Please be advised that links to third party websites are not endorsed by Estate Agent Networking - Please do your own research before committing to any third party business promoted on our website. As an Amazon Associate, I earn from qualifying purchases.

You May Also Enjoy

Breaking News

Popping the Asking Price Bubble

Where in the Uk Can Buyers Snap Up Property Bargains and Where Properties Go for a Premium Above Asking Price   New research from fast selling property company, Upstix has uncovered the UK’s most surprising postcodes for snapping up a property at bargain prices this year, highlighting a widening gap between sellers’ expectations and the…
Read More
Rightmove logo
Breaking News

Highest demand to lease office space since pre-pandemic

The latest insights from the UK’s number one commercial property website Rightmove, reveals that the number of unique enquiries to lease office space is at its highest point since pre-pandemic, as businesses look for spaces that meet modern requirements. Demand to lease office space is 19% higher than the same period a year ago and…
Read More
Planning disputes on new build land
Estate Agent Talk

Planning consultations for major infrastructure to be streamlined

Robert Bruce, a planning and infrastructure partner at law firm Freeths LLP, said he: “Welcomed the change as a significant step to speeding up the DCO process and the focus on the quality and effectiveness of the consultation, rather than box ticking and a risk averse approach to pre-application consultation due to the current legal…
Read More
Breaking News

‘The property ladder pulls further away’ warns Open Property Group

For many first-time buyers across England, the dream of homeownership continues to slip further out of reach. Despite rising wages, soaring house prices are making it harder than ever to get on the property ladder. A leading UK professional house buying company ‘Open Property Group’ based in Buckinghamshire UK, has raised concerns over the ongoing…
Read More
Estate Agent Talk

How Long It Takes to Buy a House in the UK: 5 Common Delays That Can Slow Down Your Home Purchase

Wondering how long it takes to buy a house in the UK? The average timeline ranges from 8 to 22 weeks, but even that can stretch significantly due to unexpected delays, especially if you’re a first-time buyer or caught in a chain. That’s why working with experienced professionals like Belvoir — one of the UK’s…
Read More
Love or Hate Rightmove
Breaking News

Rightmove to host Renters’ Rights Bill webinar with Guild of Lettings

Rightmove is hosting a live and interactive webinar session with the Guild of Lettings to help agents get Renters’ Rights Ready. The webinar will take place from 10:00am – 11:00am on Wednesday 23rd April. Susie Crolla, Managing Director for the Guild of Lettings, will be joining Rightmove to help agents with questions they may have about…
Read More