PROPERTY-FOCUSED peer-to-peer lenders have urged Chancellor Philip Hammond to roll back his predecessor’s efforts to cool the market in today’s Autumn Statement.
They argue that former Chancellor George Osborne’s increased levies on the buy-to-let (BTL) sector have slowed down the market and been passed on to tenants in the form of higher rents.
“The current economic landscape means home ownership is still a pipe dream for many, and as a consequence the BTL sector is now a more important component than ever in the housing mix,” said Gray Stern, co-founder and chief commercial officer of P2P platform Landbay.
“We are hopeful the chancellor has recognised this and is reflected in tomorrow’s statement. It’s time for change; activity in the private rented sector should be supported by government, not discouraged, so it’s crucial we see no further taxes imposed and the stamp duty levy reduced.
“Despite best intentions to curb property prices, government intervention through stamp duty and other taxation is actually slowing down the market across the board, and often driving up rents charged by landlords – the final straw for those struggling to save for a deposit for a home of their own.”
Osborne introduced a three per cent stamp duty surcharge on second homes that came into effect this April, amid fears that the surge in new landlords was causing house prices to soar and forcing first-time buyers out of the market. And from next April, new rules will come into effect to stop landlords claiming tax relief on the interest on their mortgages.
“Current levels of property tax are greatly impacting the market,” said Rob Walker, head of real estate tax at PwC. “While recent increases – such as the three per cent stamp duty surcharge on people buying second homes – have been aimed at the higher end of the market, they have a ripple effect.
“The chancellor could look to reverse some of the recent changes, if there’s no longer a bubble to diffuse, then the focus needs to be restoring market confidence. By emphasising property tax receipts have fallen across the board, he could show this isn’t about helping the ‘privileged few’ but making sure ordinary people can move up or down, or even get on the ladder.”
Meanwhile, online mortgage lender LendInvest has published its own three-point ‘wish list’ for the Treasury. It argues that lower taxes, more support for alternative property finance providers and encouragement of fintech would all help to improve the UK’s sluggish property market.
“We believe that government could partner with financial services firms like ours to disseminate funds to SME developers,” said a LendInvest spokesperson. “By getting more funds into the system, SMEs will have a greater opportunity to access a range of finance products and get their projects off the ground.
“As the government’s industrial strategy seeks to improve productivity across the UK, the financial services sector, and fintech particularly, will remain an integral force in driving economic growth.
“The Autumn Statement provides the chancellor an opportunity to galvanise support behind maturing scale-ups in fintech.”
The Treasury has already indicated that it will make efforts to address the housing shortage in the Autumn Statement. This includes a £1.4bn investment to build 40,000 new homes and less restrictions on how existing affordable housing funding can be used.