Of course we have already discussed the treatment of landlords, now facing another hike in the Stamp Duty they must pay on acquiring new properties, but theirs was far from the only position targeted by the new Labour administration.
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Companies and non-natural persons acquiring dwellings over £500,000 also saw their SDLT bill rise from 15% to 17%. Coupled with this was arise in the Annual Tax on Enveloped Dwellings of 1.7%. While the reasons for corporate acquisition of dwellings can be varied, including accommodation for employees, it is true that many landlords switched to the model of holding their rental portfolio in Limited Companies post 2015. Then-Chancellor George Osborne introduced changes to mortgage tax relief rules on a sliding scale that, by 2020, saw Landlords holding properties in their private names unable to deduct any mortgage expenses from rental income, leading to considerable rises in tax liability. This cut into profits, with some central London landlords reporting after tax profit drops of up to 40%.
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The ATED changes are clearly aimed at dissuading landlords who switched to the Limited Company model, as part of an overall strategy continued from previous administrations of trying to free up housing stock and increase purchases by First Time Buyers and others buying a primary residence. The expectation is another 130,000 such transactions over the next five years. Given the estimate on GOV.uk of 94,800 UK residential transactions in September 2024 alone, this number seems relatively unambitious for a five year period, and we are once again left with an impression of ideology triumphing over practical utility.
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Many who live in rented accommodation do so because they are either saving towards a deposit on a first home, are living in an area on a temporary basis or simply don’t have the income and/or credit history to support a mortgage. Making more properties available for such people to be able to buy does not fix the current elevated interest rate, nor address factors like the ongoing cost of living crisis.

Punishing landlords providing these very people with somewhere to live will serve only to dissuade the exact sort of investment these people need in order to have a roof over their heads. Fewer landlords will mean increased rent, more people choosing to stay in the family home for longer and more empty properties languishing on the market. That sort of sluggishness at one end of the market will lead to a knock-on effect of people unable to sell or move, and combined with the relatively static nature of mortgage rates, even as the base rate begins to fall, this is unlikely to do good things for the overall picture.
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None of this is good news for conveyancers. It points to fewer transactions overall, a drop in BTL-related business and increased complexity on the transactions which do go through. Coupled to the rapid pace of future changes pointed at by the conduct of this budget, it’s clear that conveyancers will need to be prepared for anything in the months ahead.

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