PRS Tenants More Satisfied as Stamp Duty Holiday Could Encourage BTL Investment
The latest annual English Housing Survey from the Government shows that tenant satisfaction in the private rental sector is steady and remains higher than among social sector tenants. The annual report, which researches and measures many different aspects of the UK's housing provision highlights that in a number of areas, private rental sector (PRS) tenants are happier with their landlords and situation than those renting in the social sector.
Against that backdrop of a positive performance by PRS landlords, a separate report from property management firm Hamptons International, suggests the stamp duty holiday until March 2021 announced by UK Chancellor Rishi Sunak could mean an average saving of almost £2,000 per buy-to-let (BTL) purchase, which could be enough to encourage some investors to make additional investments in the next few months.
PRS Landlords More Popular than Social Sector
UK government data on the country’s housing provision is updated each year, based on responses to surveys sent out to householders and tenants from all parts of the country.
The latest report, which covers April 2018 through to March 2019, highlights a number of issues including that (PRS) tenants are once again more satisfied with their landlords than tenants living in the social rental sector.
In the 2018-19 survey, some 73.1% of PRS tenants are happy with the way their landlords deal with and carry out repairs. While that’s a slight decline from a 73.4% satisfaction rate in the previous survey, it remains above the rate of 67.3% of satisfaction among the country’s social renters.
Looking back at satisfaction among PRS tenants, this is the first decline since 2011, however, it compares well with ten years ago when the satisfaction rate sat at 68.7%. In the 2008-09 survey, satisfaction among social renters was 67.6%, a little higher than in the latest report.
How Much Could PRS Landlords Save from Stamp Duty Break?
With the good news that more of England’s PRS landlords are getting things right when it comes to managing repairs and maintenance comes more possible optimism for the sector; Chancellor Sunak’s stamp duty holiday.
Many sectors of the UK’s economy have a lot of ground to make up following the coronavirus lockdown and the temporary stamp duty holiday could play a part in encouraging more activity in the housing market. Indeed, according to research from Hamptons International, the average BTL investor could save some £1,840, or 22% per transaction.
Meanwhile, for BTL investors in London and the south east who typically spend over £500,000 on their investment property, the savings could be much higher - £7,240, or 26%. Looking to north east England where property prices are lower, the average savings fall to just £280 per BTL property purchase.
It’s important to remember, however, that the 3% stamp duty surcharge for property purchases that aren’t your main residence, remains in place for investors.
“The [stamp duty] changes will certainly help support the housing market over the year ahead by reducing the cost of moving, a big barrier for many,” Hamptons International said in a recent research update. “As well as making moves more affordable for those unable to pay the stamp duty bill or for those who have found it prohibitively high, the scheme is also likely to bring forward moves which were due to take place anyway in 2021 and 2022.
However, looking ahead, the upmarket property expert added that although the stamp duty holiday is a much welcome shot in the arm for the housing market, the longer-term outlook for house prices and activity remains uncertain and closely tied to the economic recovery as lockdown eases, a new normal is accepted and the country copes with Brexit.
