Stamp Duty: Periodic Tenancies

Question

Asked by

To ask His Majesty’s Government what assessment they have made of whether periodic tenancies draw more tenants into Stamp Duty Land Tax lease returns than fixed-term tenancies; and what legislative or other steps they intend to take as a result.

My Lords, the Government are aware that the Renters’ Rights Act 2025, which abolishes fixed-term tenancies, may in some very rare circumstances bring more tenancies into the stamp duty land tax regime. We are working closely with His Majesty’s Treasury and HMRC to ensure that no tenant is brought into paying stamp duty on the rent they pay as a result of the Renters’ Rights Act, and we will update Parliament shortly.

I thank the Minister for her Answer. Will any guidance be issued by HMRC or anybody else to tenants, landlords and agents to let them know whether their tenancy will come under stamp duty land tax and they have to issue some kind of return to HMRC? Many tenants are very worried that this will happen to them, and lots of agents have no idea that this is coming.

I want to reassure tenants and landlords that very few tenants will be affected by this in the first year. A tenancy must have extremely high rents or have been running for a very long time under the previous system to even approach the stamp duty threshold in the first year. HMRC’s assessment is that this will be a very small number of cases. We intend to ensure that even in those rare instances, tenants do not face a stamp duty land tax charge as a result of these reforms. We will work with HMRC to make sure that clear and accessible guidance is available for both tenants and landlords.

My Lords, one of the ways in which we meet the concerns that the noble Lord has raised is by increasing the housing supply. Can my noble friend the Minister give us an update on the social and affordable housing programme that the Government are supporting?

I am very pleased to give the House an update on the social and affordable housing programme. We have now published its prospectus, and the Government have put in £39 billion of funding to kick-start social and affordable housebuilding at scale across the country. The core objective of that new programme will be to maximise supply, with a target to deliver at least 60% of the homes under the programme at social rent. That will be around 300,000 social and affordable homes over the programme’s lifetime. We published the guidance in November 2025, and we are now calling on all registered providers to review the details confirmed and to prepare large and ambitious proposals. We want to see the social landlord sector really embrace this. The bidding process opened in February, and we look forward to receiving some good bids.

My Lords, the Renters’ Rights Act places the full weight of delivery and its success on two public bodies—the courts to provide timely justice and local authorities to provide enforcement. Can the Minister please reassure the House that on 1 May, when these additional rights are switched on, both the courts and councils will have sufficient capacity and resources to deal with this additional workload, given that, at the moment, court delays are still long and council enforcement capacity varies according to your postcode?

We had much discussion about this during the passage of the Act, and we are working very closely with colleagues in the Ministry of Justice to implement the reforms. Work is progressing well to ensure that the courts and tribunals have the resources and capacity they need to handle the additional workload that the reforms may generate. Work is also progressing on the new digital end-to-end service for resolving all possession claims in the county courts in England and Wales. Ultimately, the Act should reduce demand on the county courts, because possession claims will be able to be brought only where there is a valid reason for the landlord to do so.

The noble Baroness is quite right about local authorities. We are helping councils to build their enforcement capacity and get ready for implementation. We have provided new burdens funding, and we have funded the Operation Jigsaw network of local councils to deliver bespoke training on the Act.

My Lords, during the passage of the Renters’ Rights Act, many noble Lords across the House raised concerns about its impact on the private rental market—with landlords leaving the market, seeking to raise rents and using Section 21 before the implementation of the Act, which does little to stop rogue landlords. Does the Minister consider the reports of Labour donor Asif Aziz’s company Criterion Capital issuing large numbers of Section 21 eviction notices, if true, a rational response to the Act or the action of a rogue landlord?

As the noble Lord will know, the basis of the Renters’ Rights Act was made under the previous Government. We wanted to make sure that we tackle the issues in the housing market and have done so with a very effective piece of legislation. On mass evictions, the latest Ministry of Justice landlord possession action statistics published in February showed a 17% reduction in county court Section 21 landlord-accelerated possession claims in quarter 4 compared with the same quarter in 2024. We have given a strong message that responsible landlords have nothing to fear from the reforms; they will have access to a wide range of possession grounds where they are needed.

My Lords, the Government told us last year that there would be a consultation on creating a new ISA product to support first home buyers in early 2026. Can the Minister confirm the timeline of that consultation and clarify whether there will be any changes to the existing lifetime ISA, which is helping first-time buyers significantly?

I am currently working across the sector on a wide range of support to provide the framework that first-time buyers will need in order to take the practical steps to access the market and to build up confidence. That work is going very well. First-time buyers benefit from paying no stamp duty up to £300,000 and can claim relief on purchases up to £500,000. Further steps will be announced in due course.