Labour claims Rishi Sunak’s stamp duty holiday led to buy-to-let bonanza

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Labour claims its analysis has found that the number of buy-to-let mortgages had tripled when the Chancellor announced his stamp duty holiday plans in his 2020 budget.

The stamp duty holiday was introduced by the Chancellor in July 2020. Subsequently it was then extended until 30 June 2021. 

To boost the UK property market

The idea was to help homebuyers and to boost the UK property market during the COVID-19 pandemic. This meant that buyers completing a purchase on a property for less than £500,000 before 1 July 2021 didn’t have to pay any stamp duty.

Stamp duty went back to normal rates in stages. From 1 July to 30 September, it was payable on the cost of properties above £250,000. Then, from 1 October, it reverted to pre-holiday rates, starting at £125,000.

Landlords purchasing buy-to-let properties still had to pay an extra 3% in Stamp Duty on top of the revised rates for each band.

At the expense of first-time buyers

Labour say that Rishi Sunak’s stamp duty holiday has led to a bonanza for buy to let landlords – and a blow to first-time buyers, their research indicates.

Labour’s analysis found that the number of buy-to-let mortgages actually tripled after the Chancellor announced the stamp duty land tax temporary reduction in his 2020 budget, a zero rate that would be increased from £125,000 to £500,000.

The concession also applied to all buy-to-let landlords and second homeowners, which Labour strongly objected to. The opposition party says that its analysis of figures from UK Finance shows that buy to let mortgages had tripled from 4,500 when the holiday was announced in July 2020, to 152,00 in June 2021, when the biggest tranche of discount came to an end.

During this time the proportion of mortgages to first time buyers came down every month from October 2020 to June 2021 according to labour’s figures.

Shadow Housing Secretary Lucy Powell says that in March and April 2021, the months before the holiday was first expected to end, the proportion of mortgages to first time buyers was down 10% on the previous year.

She said: 

“The Conservatives have wasted millions of pounds on a stamp duty holiday which benefitted landlords and second homeowners, over first-time buyers trying to get a foot on the ladder.

“Rather than seeing homes as the bedrock of a stable and successful life, the Conservatives treat housing as a commodity to be traded and profited from.”

Labour’s figures show that in the South West, mortgages for first time buyers were down 14% on the previous year in April 2021. In the North West they were down 11%, and in the East and West Midlands they were down 12% in March 2021.

Lucy Powell went on: 

“Labour is the true party of home ownership. Rather than robbing first-time buyers of their advantage, we would give them first dibs on new build homes, and stop the scandal of developments being sold off plan to overseas investors.”

A Treasury spokesperson had said: 

“Our temporary stamp duty cut helped to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.”

Tenant arrears fund

Tenants in rent arrears are to get a £65million fund to help them after the Government eviction ban and the Universal Credit uplift come to an end.

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