2011 investments in London

In September 2010 The Treasury concluded its consultation on investment in the private rented sector, which had commenced under the previous Government in February 2010. In particular, the consultation addressed the issue of the Stamp Duty Land Tax (SDLT) rate for bulk purchases, where some consultees had argued for the payment of SDLT at the lower rates implicit for individual units of 1% to 3%, rather than the top rate of 4%, which is due to rise to 5% on 6th April 2011 for residential property over £1 million. The Government was unconvinced that such a change would have a material affect on viability and that in any case the cost to the Government would not be acceptable set against the need to reduce the budget deficit. Reducing VAT rates for management fees and repairs and maintenance of private residential property was also ruled out on the same grounds.

Press commentary indicates that institutions which are targeting the private rented sector will not be deterred by this lack of support from the Government. Consortia such as Aviva Investors with residential management firm Pinnacle, and Aegon with property developer Terrace Hill, are actively raising initial equity.