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Letting agents and landlords angry at buy to let stamp duty 'surcharge'

There’s been an angry reaction from letting agents and landlords to the shock news that an additional three per cent stamp duty is to be put on buy to let and second homes. 

George Osborne made the surprise announcement in his Autumn Statement, alongside a pledge to encourage a vast house-building programme and to extend the Help To Buy programme by a year to 2021.

Some £1 billion which he believes the new stamp duty will raise by 2021 will fund some of the new homes, Osborne says. 


Lucian Cook, head of research at Savills, says this is merely the latest tax burden to fall disproportionately on London buyers and investment landlords. ”This will further suppress transactions and prices in the prime central London market, given the extent to which this market has been supported by purchases from second home owners and investor buyers. More generally, buy to let investors are likely to display greater caution faced with higher transaction costs. This is likely to be greatest among those with substantial debt who are also affected by the changes to tax relief that were announced in the July budget” he says.

Jonathan Adams, director of prime central London agency Napier Watt, says: “Buy to let mortgage holders will potentially have to pay up to 15 per cent stamp duty on future purchases and lose out on mortgage interest tax relief. The result? Fewer landlords will come into the market, there will be a lack of supply and rents will rise. The other issue is that because the stamp duty hike won’t come in until April, we could see a rush of landlords buying before then, further pushing up prices in the short term.”

There has also been a bitter response from the chief executive of the National Landlords Association, Richard Lambert, who says: “The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.

Alan Ward, Chairman of the Residential Landlords Association, adds: “The biggest losers are tenants who will now find it even harder to get the accommodation they want at a price they can afford. The extra stamp duty on buy to lets will exacerbate an already serious shortage of properties in many areas reducing choice and driving up rents.”

“This is penalising London workers who have a pied-a-terre from Monday to Thursday throughout the week and return to the family home during the weekend” says Faisail Durrani, head of research at Cluttons. 

“This additional SDLT will hit confidence in the London market, at a time when emerging market currencies are under tremendous pressure due to the faltering of global economic growth. It’s a double whammy for international buyers because taxes will increase and weaker currencies mean UK investment properties are more expensive” he says.

“The increase in stamp duty, while good for first time buyers, could have quite a negative impact on buy to let investors and subsequently the rental market. This may ultimately lead to a shortage of good quality properties or an increase in rent, which could make it much more difficult for tenants” says Jamie Lester of Haus Properties, a three-office south west London estate agency.

“This is short-sighted by the government as they have failed to address the slowdown at the top-end of the market ... The Chancellor could have put new, fairer stamp duty levels in place as so many London family homes, even in secondary areas, breach the £1.5m+ barrier” suggests Robin Paterson, chairman of Sotheby’s International Realty UK.

  • icon

    There is some rubbish being spouted in the press today.

    Raising stamp duty will have no direct impact on Landlords and their existing stock. What it might do is make Landlords think twice about increasing their stock leaving more choice for genuine first time-buyers. In the meantime Landlords should concentrate on the increased rents they will get for their existing stock as supply contracts.

  • jeremy clarke

    Simple maths to me, you put landlords costs up and they seek to recover those costs - the only way to do so is to increase rents. Yes it will only affect new buyers coming into the BTL market but as the above comment states the stock is shrinking, will continue to shrink and this move will only worsen the effect. In my opinion this was a wrong move - if this government want to down pay the deficit the easiest way would be to completely stop foreign aid!

  • Stephanos Constantinou

    totally agree with the article and the above comment of @Jeremy, the situation will get significantly worse for everyone!

  • icon

    The last time a change in circumstances was pre announced there was a mass purchase to get in by the deadline and the following day the phone did not ring and there was a massive crash in the estate agency business. Being a bit older I can remember things like this that so many in the business today have no idea about what went wrong before.

  • icon

    Just a view from beyond the Capital.

    Rents are not going to provide landlords with the necessary returns at the new rates of stamp duty even though property prices are much lower. There is a finite amount at which a property will let. Any tenant relying upon Housing benefit will also potentially suffer as supply of rental property coming to the market will inevitable be much reduced next year.

    There are other detrimental factors which could come into play, so I can see the Government finding out the hard way that this poor policy on the hoof.

    Is George Osborne thinking this will appease the proles, as it's very much a Labour type of policy? I'm surprised Jeremy Corbyn and John McDonnell haven't congratulated the Chancellor on such a retrograde step, as this is just like being something that would be heartily approved by the Guardianistas.


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