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Record Rents, Landlords’ and Tenants’ Exodus, Council Tax Increases, Lego to the Rescue, Double Stamp Duty

Pile of money showing Council Tax Increases
20 February 2023

By UKinsuranceNET In News

UK property news headlines have once again featured significant trends in the private rented sector. Many cities across the country have recorded high levels of rent, yet the exodus of landlords from the rented property market in London is still further fuelled by tenants also choosing to quit metropolitan life.

In the wider housing market, councils are forced to raise local taxes by the maximum permissible rate, one architect explains how he has been inspired by the LEGO construction toy, and others argue that UK Property buyers from overseas should pay double Stamp Duty in a bid to level up prices for locals.

Record-high Rent Increase For UK Cities

In a posting on the 13th of February, the online listings website Zoopla revealed the extent to which rents have risen in many cities of the UK.

Increases across the country as a whole reached as high as an average of £120 a month – to record their highest levels in the last 10 years – but in some major cities the rise was significantly steeper.

In London, for instance, during 2022, rents across the city rose by an average of £270 a month – an increase of more than 16% – to reach a record high of £1,976.

Several other cities also recorded increases well above an average of 11%:

  • Manchester – an annual increase of 14.8%, taking the average monthly rent to £977;
  • Glasgow – up by 13.1% to £844;
  • Edinburgh – up 12.7% to an average monthly rent of £1,130; and
  • Cardiff – up 11.7% to £1,043 a month.

Landlords Flee The Market While London Sees Mass Tenant Exodus

Despite the increase in average rents, buy to let investors continue to abandon the capital as tenants also choose to live elsewhere – out-of-town addresses potentially less heavy on the pocket during these times of inflation and the rising cost of living.

In what it described as a “mass exodus” by tenants, Proactive Investors on the 13th of February revealed that landlords are quitting the market in their highest numbers in the past three years – taking with them an estimated 66 rental properties a day from the market.

The net property loss to the rental market was an estimated 17% during 2022 compared with the previous year, said the article, with some 35,000 more rental dwellings being sold than the number bought.

Council Tax Rises Exceeding The Maximum Allowed

The majority of local authorities are planning increases in council tax by the maximum amount they are legally permitted to, in the face of severe financial difficulties, according to a story in Landlord Today on the 15th of February.

Citing research by the County Councils Network (CCN), the article explained that 84 out of the 114 local authorities – some three-quarters – that have published their intentions for the financial year 2023/24 Intend to increase council tax by 4.99%, which is the maximum they are permitted under the law.

Three of the councils concerned – Slough, Thurrock, and Croydon – have been given special permission to raise their tax by more than the prescribed 4.99%.

All of the councils approached by the CCN said they understood the financial pressures that residents of their areas faced in the light of inflation and the rising cost of living, but that increases in the council tax were an inescapable budgetary necessity.

Architect’s Crusade To Transform Housing Market Inspired By LEGO

In a bid to help landlords, tenants, and building contractors by improving the energy efficiency of homes and saving money on energy bills, an architect in Wales has taken inspiration from the principles behind the construction toy LEGO, revealed a story by Wales 247 on the 15th of February.

By “stacking” the various rooms of any building – in the same way that the building blocks of LEGO are used – architect Alwyn Rowlands maintains that building times can be significantly reduced and the buildings themselves made far more energy efficient.

The modular design of the houses means that they can still be constructed from conventional materials such as blocks and bricks and be either prefabricated or built around a timber frame on site.

Double Stamp Duty Surcharge For Overseas Buyers To ‘Level’ UK Property Market For Locals Say Lobbyists

The pressure group the National Association of Property Buyers (NAPB) argues that foreign buyers of property in the UK should be charged double the standard rate of Stamp Duty to help create a more level playing field for local buyers, according to a story by City AM on the 13th of February.

The NAPB claims that incoming wealthy foreign buyers – many from low-tax high-income parts of the world – are exploiting the UK market. Their purchases serve to reduce the available stock of housing for local residents and push up prices of all types of property whether for sale or rent.

The call to level up the playing field comes at a time when the NAPB says that nearly a quarter of a million homes in the UK are currently owned by foreign buyers – who have paid a combined total of more than £90 billion for the properties.

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