Taxation of property
Property Outlook
For anyone looking to enter the buy-to let market as a new landlord, the decision is currently far from straightforward. On the plus side:
- Average English rents increased by 8.5% over the year to September 2024, with the average monthly rental now standing at £1,336;
- Average house prices for the UK rose by 2.8% over the year to August 2024, with Scotland and Wales seeing the higher increases; and
- Mortgage costs, which have already fallen compared to last year, may fall further following the two recent reductions to the bank base rate.
On the negative side, the October 2024 Budget introduced an immediate 2% increase to the stamp duty land tax (SDLT) surcharge payable by landlords when purchasing property in England or Northern Ireland. At least the government did not go ahead with the widely anticipated increase to the rates of capital gains tax (CGT) payable by landlords.
The government is also in the process of legislating for a Renters' Rights Bill. This will overhaul the private rental sector in England, and, in particular, abolish no-fault evictions and give tenants the power to challenge rent increases.
The Scottish government is is looking at introducing rent controls, but a similar proposal considered by the Welsh government has recently been rejected.
