“Renting in English Property Hotspots: A Perpetual Cycle of Stress”

Posted 09th November 2023 by ctatax-admin

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.

Read our feature on Off Plan Property Exchange

“Renting has long been considered one of life’s most stressful experiences, akin to divorce and childbirth. And for renters in certain English property hotspots, this stress is now becoming a way of life. According to new research by Cornerstone Tax, a staggering 19% of renters in these areas have been forced to move at least five times in the span of five years due to rising rents or landlords selling up.

It seems that no matter how responsibly tenants handle their rental agreements, they can still find themselves displaced. Even if they pay their rent on time, ignore the landlord’s unfulfilled repair promises, and maintain a peaceful environment, they can still face eviction under a “section 21” no-fault order. Landlords who see the potential for higher profits through platforms like Airbnb can easily choose not to renew the contract and provide a mere two months’ notice for eviction.

Read: How an annexe can save you thousands on stamp duty

While it’s clear that younger renters are vulnerable to frequent moves – with a quarter of Gen Zs and millennials having already moved more than 10 times since leaving their family homes – older renters nearing retirement are not immune either. In fact, one out of every four renters over the age of 55, according to Shelter, worry about potential eviction and the negative impact it can have on their mental health.

To address this issue, former Prime Minister Theresa May proposed scrapping section 21 orders back in April 2019, but the implementation has been delayed. There have been subsequent delays and backtracking, such as the recent announcement by Secretary of State Michael Gove that the ban on no-fault evictions will be further postponed pending changes to the court process.

As landlords face financial challenges, including soaring mortgage rates, reduced tax relief, and the costs of upgrading older properties, many are considering selling their rental properties. However, the demise of the buy-to-let market may not necessarily be good news for first-time buyers. If developers buy up properties previously shared by multiple renters and convert them into smaller units for couples, the rental market may shrink, leaving less available housing for those still seeking rental accommodations.

Furthermore, some councils have reported unscrupulous landlords evicting tenants and then offering the properties to the council for higher prices, effectively exacerbating homelessness issues. This creates a vicious cycle where each problem amplifies the next, while short-term solutions only worsen long-term prospects.

Read: How to tell if you’ve overpaid on stamp duty land tax

The current rental market is in dire straits, with desperate conditions at the lower end. Housing allowances have remained frozen as rents continue to rise, leading to a scarcity of affordable housing. Even wealthier homeowners are not immune to frustration, as they witness their children struggle to find suitable accommodation at universities.

To rectify this situation, a comprehensive approach is needed. Building more homes for both social and private rent, along with restoring the value of housing allowances, is crucial. However, instead of addressing these fundamental issues, some senior politicians are fixating on short-term measures like cutting stamp duty, which may only serve to inflate house prices further.

It’s evident that the housing market in England is broken – it no longer works for renters or landlords, and the consequences extend far beyond these two groups. It will take significant efforts to correct the current system and its associated problems, ensuring a more stable and equitable housing future for all.”

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us for stamp duty advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty.