Finance Bill last chance for rental sector to avoid ‘triple-lock’

The triple whammy of stamp duty reform, changes to buy-to-let mortgage tax relief and the Bank of England’s new rules for mortgage lenders will have “catastrophic consequences” for the UK rental sector, according to a new report by political communications and tax policy specialists The Whitehouse Consultancy.

Recent interventions from the Treasury and the Bank of England – particularly the 3% hike in stamp duty on second homes and a reduction in tax reliefs available on mortgage interest payments – will significantly limit buy-to-let investment, inhibiting labour mobility and reducing economic activity, says the agency.

The paper, Keeping Alive the Private Rented Sector, argues that the Finance Bill, currently going through the House of Commons, is “the last political opportunity” for the housing industry to call on the Government to officially review the impact of the stamp duty surcharge and introduce a new tax efficient means for landlords to restructure their portfolios.


The moves have already faced firm resistance from the Treasury Select Committee, adds the consultancy. The Committee’s February report included the following: “The measures taken to curb buy-to-let will come at a cost, not only for those who will now face higher rents, but for the wider economy. A failure to ensure that individuals have access to a well-functioning, affordable rental market will inhibit labour mobility and reduce economic activity.” The worry is that the stamp duty surcharge and reduction in tax reliefs available on mortgage interest payments would be a deterrent to investment, and act as “an enduring constraint on the supply of privately rented properties”.

Helen Munro, Managing Director of The Whitehouse Consultancy: “The Government’s proposals will have a fundamental impact on the housing sector, and businesses need to understand the implications of the new legislation. The window of opportunity for the industry to engage with the Government on these measures is closing, and smart industry leaders should be considering how to engage with MPs and the Finance Bill before it’s too late.”

The following action is described as “crucial”:

  • Working with MPs to table a probing amendment during the Finance Bill ensuring that the Chancellor shall, within 6 months of the rise in stamp duty coming into force, publish a review of the impact of the changes made by the policy on the housing sector
  • Collaborating with MPs to reduce the impact of Clause 24 of the Finance Act 2015 by tabling an amendment providing a new tax effcient means for landlords to restructure their portfolios
  • Briefing parliamentarians on the implications of the tax changes and the importance of maintaining confidence in the buy-to-let sector
  • Applying pressure on Government to review the tax changes by way of a House of Lords Second Reading debate, a Westminster Hall debate and written and oral questions
  • Engaging with Financial Secretary David Gauke and Treasury officials and advisers to show the significance of not stifling the supply of one million rental properties the country desperately needs
  • Responding to the PRA consultation and ensuring that the new measures find the correct balance between appropriate regulation and excessive restriction on lending