Private renters would have had an extra 2.2 million rental properties to choose from if the market had grown at pre-2016 rates, according to Hamptons.

Instead, the number of rented households has effectively plateaued since the stamp duty surcharge for additional property purchases in England and Scotland was introduced a decade ago. Despite demand rising with population growth, only 5.2 million households rent privately, compared with the 7.4 million that might have been expected had pre-surcharge trends continued, it reports.

Hamptons explains that although the surcharge achieved its core objective of causing fewer purchases by investors, this - combined with some landlords choosing to sell - means there are 25% fewer homes available to rent in February 2026 than there were in February 2016.

Meanwhile, rents across Great Britain have risen 44% over the last decade, outpacing CPI inflation, which rose at 39.9% over the same period.

Decade

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

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

Reflected

This is also reflected in bidding behaviour, says Hamptons. 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% below that of a first-time buyer, as investors struggle to make deals stack up.

Head of research Aneisha Beveridge explains that domestic and international landlords were once some of the biggest buyers of city centre flats. “Prior to 2016, housebuilders often had waiting lists of investors, sometimes years before they even put a spade in the ground,” she adds. “Their partial withdrawal has reduced viability and slowed the pace of housebuilding, particularly in the new-build apartment sector, where sales are now taking longer and often completing at lower prices.”

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