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That was quite a roundabout argument. There are lots of things that would impact people’s ability to have the funds to put down a deposit; rent is only one part of that. Other aspects are the cost of living, the measures that we are taking to support first-time buyers, and the increase in ADS, which I think will help to shift the balance in the market in favour of first-time buyers and others who are buying a property in order to live in it.

The argument that you are making is that the landlord is charged the additional ADS, which is then charged to the tenant, who would be unable to pay a deposit as a consequence. I think that the impact of the additional ADS would be diluted in that process and I suggest that there are other things that are probably more significant for the tenant’s ability to compete in the market, if they choose to do so. There is a lot of data on that across the piece, which you could look at, which could help to make that argument.

We have just completed an ADS review that pulled up some specific items, or wrinkles, as you might want to call them, in the system, which we are addressing. An LBTT review is coming up shortly.

Those properties are not going anywhere. If they are not bought by an investor to let, they will be bought by someone who will live in them. If those properties are being bought by someone who is going to live in them, we would not necessarily see that as a negative consequence. The issue of build to rent and investment coming in to add new capacity to the system, which is hugely important, is a separate issue, but it is outside the scope of ADS, because it does not apply to large numbers of properties.

It is important to recognise that the housing market is always going to be a mixed market, if you want to call it that. People will want to buy houses and people will want to rent them, because they want to stay somewhere for a short period of time or because it suits their financial, family or employment situation. There will always be a need for people to rent properties, so a supply of rental properties is obviously important to have in the mix. It is not that we want everybody to be a property owner; it is about recognising that there is a mixed market and understanding what policy measures we can take that are best suited to ensuring that the market is well balanced.

The measure, which supports first-time and other buyers to live in properties by giving them a competitive advantage, is the right thing to do. It fulfils a policy objective and raises additional revenue, which is clearly welcome, but there is no end game in the sense that we do not want to significantly alter the market in terms of the number of rental properties versus the number of owner-occupied properties.

Thank you for raising that issue, which I know you have raised before. There have been several tweaks made over time to the eligibility process, as various issues have arisen. We can certainly look at what scope there is to address that issue.

The purpose of the policy is to raise revenue and rebalance the market so that people who want to buy a house to live in—first-time buyers or otherwise—have a competitive edge over those who are buying a property to let.

The data shows that the number of registered landlords is broadly flat, and the number of registered properties has increased over the past two and a half to three years, so the policy is not having an impact on that.

Thank you very much.

They are linked in the sense that, if you want to build new properties, there are a range of factors to be considered that are relevant to those decisions. However, at that end of the market, ADS does not apply to the purchase of more than six properties.

A typical buy-to-let landlord does not build a new property to put on the market; they buy an existing property to let it out. A property is either going to be bought by them or by someone who wants to live in it, but the total number of properties in the market stays the same.

On the build-to-rent market, transactions that involve more than six properties are excluded from ADS.

There is quite a lot in that question. With regard to the impact on the number of properties, clearly the number of properties in the market will remain the same. They will be owned either by landlords or by residents—that is, owner-occupiers. The trend over a number of years has been a gradual reduction in the number of second homes from 27,000 to about 24,000 since 2016-17 or thereabouts, but it is hard to ascertain how much of that has arisen as an impact of this specific measure.

There has been a 14 per cent reduction in the number of ADS transactions, but there has been an 8 per cent reduction in the overall number of LBTT transactions. The reduction in the number of ADS transactions has been slightly higher than the number of property transactions in general, but it is hard to know how much of that is due to the specific measure.

With regard to the increase in ADS from 4 per cent to 6 per cent, the SFC based its forecast on an assessment of behavioural impact, but what we have seen is that the revenue from ADS has been higher than that forecast. The SFC has used the same methodology for its projections, which suggest a significant increase of £30 million per year or thereabouts in the revenue coming through from ADS as a consequence of those changes being taken into account.

The final point to make is about the number of registered landlords and registered properties. Over the past three years, the number of landlords has been broadly similar, and the number of properties has slightly increased, so I suggest that there is no evidence that there has been any impact on the market.