This will disappoint landlords who have held properties for long periods. However, estate agents who had been deluged with properties for sale in May and June are relieved at the news.
that Osborne was softening us up with dire predictions so when the rate increase came out, it wouldn’t impact confidence," notes David Adams, head of residential at national estate agency firm Chesterton Humberts. His offices saw a 150 per cent increase in instructions in the lead-up to the Budget - and seeing as the change is effective overnight, he thinks a lot of this stock will now be withdrawn from the market.
There was good news for owners of, who will retain their tax advantages (a loophole Labour had planned to close).
However, landlords who rent property to housing benefit claimants are in for a nasty shock. From next April, housing benefit paid to private landlords will be capped at a maximum rate of £250 per week for a one-bedroom property, rising to £400 a week for four bedrooms. This sounds like a lot, but try telling that to landlords who have been enjoying near-parity with market rents. And from October 2011, the Budget small print sets out that local housing allowance rates will be set "at the 30th percentile of local market rents", thus putting a stop to one of the most lucrative gravy trains of the buy-to-let world. If landlords are unwilling to drop rents, claimants will have to make up the shortfall - or move to a cheaper area.
Commercial property investors will be glad that the coalition rubber-stamped legislation allowing real-estate investment trusts (Reits) to issue stock dividends, which will aid cash conservation. But investors in retail property companies will shudder at the implications of the . With nearly 13 per cent of the UK's shops standing empty, according to the British Property Federation, there are fears that this could be the last straw for struggling retailers, leading to rising insolvencies and rental voids.
