Newly enacted Renters' Rights Act branded "really awful"
Mortgage brokers have expressed significant opposition to proposed property tax changes and the recently enacted Renters’ Rights Act.
Responses gathered in the latest Business Outlook Survey by Family Building Society indicated that a large majority of brokers disapprove of recent government measures affecting the housing sector.
Four in five respondents believe the Renters’ Rights Act, which received Royal Assent yesterday, will negatively affect both landlords and tenants. Many brokers anticipate that the legislation will prompt more landlords to leave the market, reducing the supply of buy-to-let properties and leading to higher rents.
One broker respondent described the new law as “really awful”, suggesting that “it will drive more landlords out of the market and will lead to fewer buy-to-let properties available to rent.”
Concerns also extend to property tax reforms expected to be announced in the upcoming Budget on Nov. 26. Sixty-nine percent of brokers surveyed anticipate a negative impact from proposals such as extending National Insurance to landlords and replacing Stamp Duty with an annual property tax.
Another broker commented that such changes would have “a massive impact on the housing market which could take a dive.”
Meanwhile, confidence in the government’s ability to meet its target of building 1.5 million new homes by 2029 is low among brokers, with 94% stating the goal is unlikely to be achieved. “Absolutely no chance,” said another broker respondent.
“Our survey, tracking the sentiments and views of brokers on the mortgage and housing market in general, which we have been running since 2023, reveals the depth of feeling to the government’s tinkering with property tax and proposed legislation,” stated Alistair Nimmo (pictured right), director of marketing at Family Building Society.
“Brokers are also nervous of the continued speculation about the Budget next month and the potential effect on the housing market.”
The survey also found that first-time buyers continue to represent the most active segment in the mortgage market. However, brokers noted a decline in demand among younger buyers, with the proportion seeking to enter the property market falling from 76% in April to 64% at present.
In addition, 75% of brokers observed a rise in applications for two-year fixed rate mortgages over five-year deals, indicating ongoing uncertainty about future interest rates.
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