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Published: 16 March 2026

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March 2026 marks 10 years since the ‘second home’ stamp duty surcharge reshaped the economics of investing in residential property.  

Introduced on 1 April 2016 for additional property purchases in England and Scotland, it marked the start of a shift between the tax treatment of owner-occupiers and investors.

Whilst it was initially set at an extra 3% on top of existing stamp duty rates in England, the surcharge was later increased to 5% in October 2024.  

There is a similar 5% surcharge in Wales, while in Scotland the equivalent rate is now 8%.

To mark the anniversary, lettings agency Hamptons has undertaken a detailed analysis. 

What changed – and why it mattered

\The surcharge dramatically increased the cost of purchasing an investment property.  

Today, a £350,000 buy-to-let in England attracts a £25,000 stamp duty bill for an investor, compared with £7,500 for a mover and £2,500 for a first-time buyer. 

By design, the policy tilted the market away from landlords.  

But despite accounting for a smaller share of all transactions, by the 2024/25 tax year, surcharge payers accounted for 48% of all residential stamp duty revenue.

 A decade on: 2.2 million ‘missing’ rental homes

These higher taxes, alongside other regulatory and demographic changes, had a profound effect on the size of the private rented sector.  

Hamptons’ analysis suggests that had the private rented sector continued to grow at pre-2016 rates, there would be an additional 2.2 million households renting privately across Great Britain.  

Instead, the number of rented households has effectively plateaued.

Despite demand rising with population growth, only around 5.2 million households rent privately today, compared with the 7.4 million that might have been expected had pre-surcharge trends continued. 

Proportionally, this means 18.0% of households now rent – far from the 25.6% that would have mirrored the 1960s-style levels implied by earlier growth rates (chart 1). 

The surcharge achieved its core objective: fewer purchases by investors.  

But fewer landlord purchases, combined with some investors choosing to sell, have resulted in 25.4% fewer homes available to rent in February 2026 than in February 2016.

Investor activity falls as taxes rise

In the 12 months before the 3% stamp duty surcharge was initially introduced in England and Scotland on 1 April 2016, investors rushed to beat the deadline, with 16.5% of homes bought by landlords, above the previous five-year average of 14.5%.

However, in the decade since the surcharge was introduced, the average share of purchases made by landlords has fallen to 11.8%, reaching a low of 10.8% so far in 2026, following the 2024 surcharge increase from 3% to 5%. 

The share of purchases bought by landlords has also fallen after subsequent stamp duty surcharge hikes across England, Scotland and Wales.

This decline in investor appetite has had several knock-on effects – not only for tenants and rental affordability, but also for housebuilding investors, who have traditionally helped de‑risk development schemes by buying off‑plan.

Share of homes bought by an investor

Source: Hamptons                                                                                        

Tighter rental supply pushes rents above inflation

For long-term tenants and those unable or unwilling to buy, the surcharge has been less favourable.  Rents across Great Britain have risen 44.1% over the last decade, outpacing CPI inflation, which rose at 39.9% over the same period.

Rents have risen by an average of 4.0% a year since the surcharge was introduced, up from 3.0% during the five preceding years.  

This suggests the surcharge has added around 1% to annual rental growth over the last decade – equivalent to an additional £70 per month.

First-time buyers are the main beneficiaries – but not all have gained

First-time buyers have been the main beneficiaries of the second home stamp duty surcharge.  

They now make up a record share of purchasers and are significantly less likely to find themselves competing with a landlord.

Share of offers made by first-time buyers where an investor is also bidding

Source: Hamptons         

In the 12 months before the surcharge was introduced, more than a quarter (26%) of first-time buyers faced competition from an investor when submitting an offer (table 2).  

Today, that figure has fallen to less than a fifth (19%), reflecting both fewer investor purchases and the rising first-time buyer demand.

This reduction in competition has been most pronounced across the South of England, particularly in London and the South East. 

But in more affordable regions – the North West, Yorkshire & Humber, Scotland and Wales – competition from landlords has increased as investors have gravitated towards higher‑yield, lower‑cost markets.

This is also reflected in bidding behaviour.  

In the 12 months running up to the surcharge’s introduction, the average investor offer was 0.8% below the average first-time buyer offer.  

Today, higher tax bills mean the average investor bid is 2.0% below that of a first-time buyer, as investors struggle to make deals stack up.

Around three-quarters of the “missing” rented homes – roughly 1.4 million – are now lived in by owner-occupiers, broadly matching the government’s figures for growth in homeownership over the same period.

However, the surcharge has also likely suppressed housebuilding.  The remaining 25% of ‘lost’ homes (around 800,000 properties) have not been built. 

These are new units that might previously have been purchased by investors, often one to two years off-plan, which significantly helps with the developers’ cash flow.

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Published: 09 March 2026

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Landlords across England and Wales face a £26bn challenge to meet the government’s 2030 energy efficiency targets.

Fresh analysis from Just Landlords shows that 3.38 million properties currently fall short of the proposed minimum EPC rating of C, with upgrade costs in some areas exceeding nearly half of annual rental income.

Under the government’s Warm Homes Plan, all tenancies must reach Band C by 1 October 2030. While the average cost to bring a property into compliance is £7,633, costs vary widely—rural and northern regions face bills as high as £12,000.

Just Landlords has calculated a ‘repair-to-rent ratio’ to show how long it will take landlords to fund essential upgrades. In Powys, for example, where 83% of properties are non-compliant, the average retrofit bill of £10,759 is equivalent to 148% of the area’s average annual rent of £7,248.

Areas with Highest Repair-to-Rent Ratio

1. Powys – 148%
2. Hartlepool – 138%
3. Isle of Anglesey – 135%
4. Gwynedd – 131%
5. Northumberland – 129%

In a stark contrast, thanks to higher rental prices, landlords in London can cover retrofit costs with just a few weeks of their rental income.

Areas with Lowest Repair-to-Rent Ratio

1. Kensington and Chelsea – 20%
2. Westminster – 22%
3. Islington – 25%
4. Hammersmith and Fulham – 25%
5. Camden – 26%

This clear divide between regions continues when looking at current compliance levels, with the majority of the most compliant regions being found in major cities and urban areas.

Most Compliant Regions

1. Tower Hamlets – 66% compliant
2. West Northamptonshire – 55% compliant
3. Southwark – 53% compliant
4. Bracknell Forest – 51% compliant
5. Islington – 51% compliant

Meanwhile, in more rural and coastal areas, the vast majority of homes require immediate investment.

Least Compliant Regions

1. Isles of Scilly – 90% non-compliant
2. Ryedale – 88% non-compliant
3. Isle of Anglesey – 87% non-compliant
4. Burnley – 85% non-compliant
5. Pendle – 85% non-compliant

As well as reporting higher levels of non-compliance, many of these regions also represent the highest physical risk, with over half of properties currently having EPC ratings of E, F or G. These ‘deep retrofit’ areas require major structural interventions, such as solid wall insultation and heat pumps.

Deep Retrofit Regions

1. Isles of Scilly – 70%
2. Isle of Anglesey – 60%
3. Ryedale – 57%
4. Eden – 56%
5. Powys – 52%

Kimberley Kealing, managing director of Just Landlords, said: “While the drive towards more energy-efficient homes is a vital step towards Net Zero, it involves a massive financial burden for landlords. Shockingly, our data reveals that for many landlords, the cost of renovations could exceed their annual rental income by nearly 50%. Without significant support, this ‘green tax’ could leave landlords questioning the financial viability of their properties.”

“From an insurance perspective, this national renovation project carries its own risk. Major works can increase a property’s risk profile, with a higher chance of claims related to things like structural damage, escape of water and fire. Landlords in these ‘deep retrofit’ areas must ensure their coverage is tailored for the scale of works being undertaken.”

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Published: 07 March 2026

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Chancellor Rachel Reeves’ Spring Forecast has provoked a predictably diverse reaction.

She admitted that growth in the UK economic in 2026 will be less than previously expected.

The Office for Budget Responsibility (OBR) predicts economic growth for this year will be only 1.1% – it has previously forecast the economy would grow by 1.3% in 2026.

The OBR expects economic growth to pick up in following years: to 1.6% in 2027 and 2028, and then 1.5% in both 2029 and 2030. 

Reeves also admits unemployment is forecast to peak in 2026, and then fall every subsequent year until 2029.

She says it will “end the Parliament at 4.1% – lower than it was at the start”. Unemployment for the last quarter of 2025 was 5.2%, the highest level in years.

However, the forecasts don’t take into account the impact on energy prices and economic turbulence caused by the Iran War.

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In response James Bentley at Financial Markets Online comments: “Her speech has been completely overtaken by events. 

“… With the UK stock markets a sea of red, encouraging economic forecasts and a Chancellor in self-congratulatory mood count for little. 

“The Pound picked up against the Euro, but both the FTSE 100 and FTSE 250 barely moved following her speech.

“Two big questions remain – how far will equities fall, and will the surge in oil and gas prices nix any chance of interest rate cuts in the coming months?”

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Sam Kirtiker, chief executive of The Mortgage Broker Group, states: “For the mortgage industry, these calmer waters encourage rate switches and remortgages, which in turn encourage competition and put more pressure on lenders to deliver faster, smoother processing and more sustainable affordability.

“What was really missing today was anything that tackles the root problem in housing, and the fact that we still don’t build enough homes in the places people need them.

“Mortgage rates can move up and down, but if supply stays tight, it keeps prices and rents under pressure.”

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Vanessa Hale, Head of Research & Strategy at BNP Paribas Real Estate, says: “We are operating in an environment of constraint. Vacancy rates remain low across many sectors, development pipelines are restricted by viability and planning friction, and regulatory evolution continues to shape investor decision making. 

“For 2026, we are forecasting investment volumes of around £56 billion, representing steady growth on 2025. Pricing is more stable, capital is more decisive and confidence is gradually returning.

“What needs to happen now is greater clarity and delivery. 

“Planning reform must translate into viable development. Energy infrastructure needs to scale at pace to support digital growth. Policy consistency will be critical to unlocking supply. 

“For investors and occupiers alike, the priority is disciplined capital allocation, active asset management and a focus on assets that can deliver resilient income and long-term relevance in a more selective market.”

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Rightmove’s Colleen Babcock adds: “It was always expected to be lower‑key, and the lack of headline‑grabbing announcements should help give movers more confidence and certainty right now.

“Looking ahead to the Autumn Budget, which is the government’s big opportunity for policy change this year, we’d really like to see stamp duty properly looked at. 

“The current bandings haven’t kept up with house prices, and as a result less than half of homes in England are now stamp‑duty free to first-time buyers, falling to just one in ten homes in higher‑priced regions like London. 

“For most movers, the tax is unavoidable, and it can be a real deterrent, particularly for those at the top of chains considering a downsized move.

“With around seven or eight months to go until the Autumn Budget, there’s time for the government to give some serious thought about how the system could be improved.”

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Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The Chancellor hasn’t delivered any encouragement for first-time buyers, who are the engine room of the housing market and enable transactions to be unlocked further up chains. 

“There was nothing in terms of stimulating more new housing or any detail as to how she plans to increase transactions, which are not only good for the property industry but also job and social mobility, as well as keeping house prices in check.

“While the Spring forecast is unlikely to choke off recent increases in home buyer and seller confidence, what happens in the Middle East – with its potential to increase inflation and keep interest rates higher for longer – may have more of an impact.”

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Published: 02 March 2026

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What is the Spring Statement?

The Spring Statement is effectively an economic update. Unlike the Autumn Budget,  which is typically where major tax and spending decisions are announced, the Spring Statement provides a progress report on the economy and updated forecasts from the Office for Budget Responsibility (OBR).

While it rarely contains large housing policy changes, it can influence the broader financial outlook, which then plays a significant role in how mortgage rates are set. Stability in inflation, interest rates and government finances supports the conditions lenders rely on when pricing mortgage deals.

This means that the wider economic outlook can still influence household finances and mortgage affordability, even without direct housing announcements.

Will the Spring Statement 2026 affect mortgage rates?

Individual lenders set their own mortgage rates, which are influenced by the base rate and other market factors –  including any measures announced in the upcoming Statement. 

However, the tone and economic signals within the Spring Statement can influence financial markets. If the statement reinforces confidence that inflation is easing and public finances are stable, this can help maintain a steady mortgage rate environment.

Mortgage rates have already adjusted significantly over the past two years, and anticipated base rate movements are typically priced into fixed-rate mortgage deals well in advance. In the current climate, no surprises would actually be a positive outcome for the housing market.

Ultimately, mortgage pricing is driven more by inflation expectations and swap rates (which are used to determine fixed-rate funding). While it’s very rare that political announcements in the Budget have an impact on this, these things do happen – as we experienced with Liz Truss’s mini-budget in 2022.

What does this mean for existing homeowners?

For homeowners currently on a fixed-rate mortgage, the statement itself is unlikely to trigger immediate changes to monthly repayments. However, the broader economic outlook it presents can influence where mortgage rates move in the months ahead.

If you’re approaching the end of a fixed-rate deal in 2026, it’s important not to leave decisions until the last minute. Many lenders allow borrowers to secure a new mortgage rate up to six months in advance. This provides a level of certainty and reassurance, while still allowing flexibility if more competitive remortgage rates become available in the interim.

Acting early also helps avoid reverting onto your lender’s Standard Variable Rate (SVR), which is typically more expensive.

What should homeowners considering moving do?

If you’re thinking about moving home, the key question is what you can comfortably afford now, rather than whether rates might edge slightly lower in the months ahead.

Compared to the volatility of recent years, the housing market is now operating in a far more predictable rate environment. Mortgage lenders have expanded their product ranges, and competition has strengthened as market stability has improved.

While some homeowners may be waiting for mortgage rates to fall further, delaying decisions in the hope of perfect timing can sometimes mean missing opportunities elsewhere in the market. Having clarity on your borrowing power and mortgage options now puts you in a stronger position when the right property becomes available.

Should I wait for mortgage rates to fall?

It’s natural to hope for lower rates, but expected movements are often already priced into mortgage deals.

While interest rate forecasts suggest the potential for gradual easing, markets adjust ahead of official decisions being made. Waiting for a significant drop could leave borrowers exposed if conditions change unexpectedly.

Whatever your plans are, the more productive approach is understanding what is affordable now, and reviewing options regularly with the guidance of an expert mortgage adviser.

Why speaking to a mortgage adviser matters

The housing market moves quickly, and political announcements don’t always reflect individual circumstances.

A mortgage adviser looks at your income, deposit, long-term plans and more – not just headline rates. Over the past year, we’ve seen continued lender innovation and strong competition across the mortgage market, meaning many borrowers may qualify for solutions they aren’t aware of.

Whether you’re remortgaging, moving home, or reviewing your options, expert advice helps you make informed decisions, regardless of what the Spring Statement does or doesn’t announce.