House sellers warned ‘thousands of purchases could be abandoned’ after Chancellor’s surprise Stamp Duty hike

Buy-to-let landlords and second home owners were expecting another tax squeeze from the Chancellor.

But what they got was a whack with a hammer.

Not an increase in general taxation or the Capital Gains Tax they pay when selling a rental property, but a whopping 2% uplift in the Stamp Duty payable when buying a home to rent out.

A sector rendered fragile by successive tax raises and interest rate rises is now likely to be clinging on by its fingernails after today’s announcement.

Fewer than one in 10 mortgage applications made this year were for a buy-to-let loan, less than half of what it was just a few years ago.

That share is now likely to plunge further as would-be landlords run the numbers and decide they just don’t stack up.

The changes come into force from tomorrow, so there’s a real danger that thousands of purchases that were already in the pipeline will now be abandoned.

But while hammering buy-to-let landlords is almost a national pastime for Chancellors of all political stripes, the severity of Rachel Reeves’ decision took many people by surprise.

The irony is that it’s not just landlords who will feel the pain. A third of Britons don’t own their own home, and for many of them, renting privately is the only option.

With rents already rising and the supply of rental properties about to be further disrupted, rents could now climb even higher. Far from solving the housing crisis, this, at least in the short term, could well exacerbate it.