Stamp Duty Holiday Impacting Local Rental Market?

18th August 2020 posted in Sellers Buyers Landlords Tenants

At Hunters Forest Hill, we aim to ensure you make informed decisions regarding the housing market. The stamp duty holiday introduced by the Chancellor on 8th July has impacted the housing market, but of course, it will also influence activity in the rental market.

We want you to make an informed decision at all times, so we have looked at the rental market in Forest Hill, and what changes will likely occur.

According to Dataloft, the average monthly rent in Forest Hill over the past 12 months is £1,345 per calendar month. When you consider the changes in the market in recent weeks, there is a strong chance that these rental figures have been affected.

Have rent rates in London dropped?

In a study carried out by Rightmove, asking rents in London are 0.6% lower now than they were for July 2019. Information published by the Guardian suggests asking rental prices are 8% down since February in Zone 2 of the capital, and there is also information provided by SpareRoom which is along similar lines.

Rightmove’s commercial director and housing market analyst Miles Shipside said; “The pause in the rental market has led to some distorted figures over the past few months, especially in cities where landlords with short-term lets made the swap to instead try and find a long-term tenant. Both rents outside London and demand being at a record high isn’t good news for many tenants looking to move right now, especially as we know there will be even more competition for those attractive properties with more space, bigger gardens and a spare room.”

Are flats being supplied to rental market, and is there demand?

At the start of the lockdown process, new rental listings fell by an average of 50%. However, as of mid-July, the number of new rental listings is 1% higher than this time last year.

There has also been an increase in demand for rental property. As of the first week in July, Rightmove suggests there was an all-time high regarding phone and email enquiries, and that rental demand in the UK is 40% higher than it was in July 2019.

Miles Shipside continued by saying; “There are early signs that some existing London renters are looking to move further afield, adding to the large increase in the number of properties up for rent on Rightmove in the capital, so prospective tenants there could find there’s some room to negotiate especially if they are happy to sign a longer-term contract than usual.”

Landlords are looking to expand their property portfolio

While the stamp duty holiday is likely to encourage more people to buy property, there is an indication it will assist many landlords expand their property portfolio, or to buy their first BTL property.

Landlords have to pay an extra 3% stamp duty, but with no standard stamp duty payable on the first £500,000 of the property price; there is a chance for landlords to lower the cost of purchasing property.

How will this affect tenants?

Miles also said; “Many renters may feel they’ve been left out of the chancellor’s recovery packages, but one glimmer of hope is that the temporary stamp duty savings may entice more investors to expand their portfolio. If this does happen we could see more choice for tenants and in turn prices may stabilise for a while, but it will take some time.”

At Hunters Forest Hill, we know selling property is challenging, but we are here to assist you in the process. If you aim to buy, sell, let your home or rent property, we are active in New Cross, Peckham, Dulwich and Brockley, in addition to Forest Hill, so get in touch with one of the top three agents in London, and we will be happy to assist you.