The Intermediary Mortgage Lenders Association (IMLA) has responded to the Spring Budget statement from Chancellor Jeremy Hunt.
The trade body commented on Hunt’s announcements regarding Capital Gains Tax and Multiple Dwellings Relief.
Kate Davies (pictured), IMLA’s executive director, said: “The Chancellor’s announcement that Capital Gains Tax will be reduced from 28% to 24% for higher or additional rate taxpayers selling a residential property is little more than a sop to those landlords forced to exit the private rental sector by tough economic conditions and a punitive taxation system. And not even much of a sop, given that the tax-free allowance for CGT is set to decrease from £6,000 to £3,000 on 1st January 2025.
“IMLA would like to have seen the Chancellor offer more support to the sector by announcing a reduction in the 3% additional Stamp Duty which has been levied on second and subsequent property purchases since 2016. This extra tax is an added financial burden on the private sector landlords who provide homes for 20% of the UK’s households, at a time when our research indicates they are anticipating an increase of 80% in their mortgage costs over the next two years.
“Given the dramatic imbalance between supply and demand in the private rental sector, which has pushed rents to record levels, an incentive to encourage landlords to invest in more properties and increase supply would have been very welcome.
“Instead, we got the contrary, with the abolition of Multiple Dwellings Relief (MDR). Jeremy Hunt freely admits this relief was aimed at encouraging investment in the Private Rental Sector, and government figures estimate that MDR was worth £730m to investors between 2016 and 2022. Scrapping this incentive is a surprising blow, at a time when the sector desperately needs support.”