But one thing is clear; the government disrupted the dynamics in the housing market when it began phasing in Stamp Duty rises for second properties.
So why didn’t it come to the industry to meaningfully ask what it thought and whether the changes would work?
It is the government’s responsibility to ensure stability, but despite its good intensions, cuts to stamp duty and improvements to help stimulate supply and transactions have clearly backfired.
One year on, many landlords are still feeling the sting of the major tax hike on second homes and investment properties, property purchase activity continues to be weak and rent rises are likely to increase as landlords pass on new costs to tenants.
Earlier this year, lenders reported a 42% fall in loans to landlords, highlighting how these changes are continuing to bite and are hampering confidence in the buy-to-let sector.
In addition, renters are bracing themselves for a 25% cost hike and it will certainly be interesting to see if landlords raise rents or abandon ship altogether. Of course, this could restrict rental property availability further, forcing renters to move at a time when policy experts are urging the government to make long-term renting the norm.
However, on a more positive note, as more landlords retreat in the housing market, this is leaving first-time buyers in a much stronger position to buy a property, although many are resorting to the Bank of Mum and Dad which is now the ninth biggest lender.
This isn’t to say that government intervention in the housing market needs to end. It is quite the opposite actually. The government should be intervening in the market in order to get more homes built.
It is just frustrating and nonsensical that it failed to meaningfully consult the industry when it decided to change stamp duty for buy-to-let.
At the very least, the government should have worked and liaised with the Association of Mortgage Intermediaries or the key lenders in the market who know how the market works and how to spot opportunities and market trends.