Welcome to our monthly property newsletter.
This month, we look at proposals to reform Stamp Duty Land Tax (SDLT), the government’s progress towards its target of delivering 1.5 million new homes, and how the conflict involving Iran has contributed to recent mortgage rate volatility.
If you would like to discuss any of the topics covered, please get in touch.
Parliament Housing Committee: reform SDLT to help first-time buyers
A cross-party Parliamentary committee is calling for major reform of Stamp Duty Land Tax (SDLT) as part of a broader package to improve access to home ownership, particularly for first-time buyers.
The Housing, Communities and Local Government Committee has warned that home ownership rates in England have fallen over the last two decades. It argues that current tax settings, including SDLT, contribute to affordability challenges and reduced housing market activity.
The Committee has recommended that the government launches a formal consultation by the end of 2026 to explore alternatives to SDLT.
Options under consideration include:
- Replacing SDLT entirely with a different property tax.
- Reducing SDLT rates to encourage more property transactions.
- Restructuring price bands to reflect local markets.
- Revising reliefs and exemptions to better meet policy objectives.
The Committee also stressed that any reform must balance increased market activity with the tax revenue SDLT generates for the public finances.
Alongside tax reform, the Committee is also calling for:
- Delivery of 1.5 million new homes.
- Greater powers for councils to build.
- Stronger action to bring empty properties back into use.
This last point may be particularly relevant for landlords with vacant properties, as increased council powers could affect long-term empty homes.
What this means for you
There are no immediate changes to SDLT, but a consultation could be coming. Future reforms may affect transaction costs and portfolio strategy and policy pressure may also increase on unused or under-occupied property.
In short, SDLT reform is firmly on the agenda and landlords should expect continued discussion around changes designed to improve market mobility and access for first-time buyers.
To read the Committee’s report, click below:
Is the government on track to deliver 1.5 million new homes?
The government has committed to delivering 1.5 million new homes in England during this Parliament, measured as “net additional dwellings”, including new builds, conversions and demolitions.
However, current progress suggests the target is not yet on track.
Around 208,600 homes were added during 2024/25, a reduction compared with the previous year.
More recent estimates indicate that 342,100 homes were delivered between July 2024 and March 2026, representing around 23% of the government’s overall target.
To achieve the commitment before the next election, due by August 2029, the pace of housebuilding will need to increase significantly.
For landlords, the level of housing supply continues to influence several important factors, including rental demand and pricing, capital values and policy intervention risk.
The government expects delivery to accelerate over the coming years rather than follow a consistent annual pattern. However, industry bodies and housing analysts have already questioned whether the target can realistically be achieved.
Official estimates also suggest that around 370,000 homes are needed each year to meet demand, underlining the continued pressure on housing supply.
What this means for you
In the short term, limited housing supply is likely to continue supporting demand across the rental market.
Over the longer term, pressure to increase housebuilding and reform the planning system is expected to remain high. Continued concerns over housing affordability may also result in further policy measures affecting landlords.
Overall, the housing shortage remains unresolved, sustaining demand in the rental sector while increasing the likelihood of further policy intervention.
For more information, see the FullFact article:
How the Iran conflict could affect mortgage rates
Mortgage rates have become more volatile than expected, with rising geopolitical tensions, including the conflict involving Iran, contributing to changing market expectations.
Earlier this year, markets had anticipated gradual reductions in fixed mortgage rates and lower borrowing costs over time.
Since then, that outlook has weakened. Recent movements illustrate how expectations have shifted:
2-year fixed rates rose from 4.83% to 5.90%, and 5-year fixed rates rose from 4.95% to 5.78%. Now they both sit at around 5.6%.
Although rates have eased slightly in recent weeks, they remain significantly higher than earlier forecasts.
For property investors, higher borrowing costs can:
- Reduce net rental yields.
- Increase the cost of refinancing.
- Put additional pressure on cashflow.
The Bank of England expects:
- Around 53% of borrowers to face higher mortgage payments.
- Average monthly repayments to increase by around £80 when refinancing.
What this means for you
With mortgage rates remaining volatile, landlords should continue to plan carefully when considering borrowing or refinancing.
Higher borrowing costs can have a direct impact on cash flow and investment returns, making it increasingly important to factor changing borrowing costs into future property decisions.
