Buying agent Black Brick has expressed the hope that the Chancellor reduces Stamp Duty rates, warning that the property tax and Brexit have put buyers off purchasing second properties and may also be deterring foreign investors.
Black Brick has revealed that all of its transactions this year have been for primary homes.
In comparison, the buying agent says half its deals were for main residences last year, while they represented just a quarter in 2016.
Camilla Dell, managing partner at Black Brick, blamed this shift on the additional Stamp Duty charges and Brexit uncertainty.
She said: “This complete shift in people buying second homes is a direct result of Stamp Duty and the additional 3% in tax people now have to spend on a second home or a buy-to-let.
“The consistent rise in the number of our clients purchasing primary indicates that clients are no longer buying for investment, or for discretionary second home reasons. They are buying to live here and choosing London as their home so they are close to work and London’s excellent schooling options.”
Dell said Chancellor Philip Hammond should take note of falling Stamp Duty receipts.
She said: “This is the first time there has been real evidence that supports the notion that higher tax rates do not lead to increased tax take.
“Whilst Stamp Duty remains a political hot potato, we can only hope that Hammond takes note of these figures and looks to reduce the rates at some point in the future.”
Dell also suggested that foreign buyers were staying away until after Brexit, revealing that two thirds of its clients are from the UK, up from 50%.
She added: “Looking to the second half of 2018, we expect the number of UK buyers to continue to rise. Those who don’t need to move are choosing to wait until after Brexit, and this is particularly true for international buyers.”
At the risk of sounding boring on this subject of stamp duty, again it is London which is suffering more from the 3% than anywhere else. There is little doubt that this additional charge is causing problems in the buy to let market which needs to be addressed, but one of the main reasons it was introduced was to deter new holiday home owners and free up more property for people who need a home to actually live in. Here in the West Country it has had that desired effect. Not to a large degree, but many agents down here are now selling selling former second homes and second home suitable properties to primary buyers and prices have not been affected because of the huge gap between supply and demand for these type of homes. Yes, the stamp duty regime does need reforming, but please remember, Londoners, that you are not the whole of England and Wales!
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Surely the intention of the tax was to discourage second homes?
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Will.
Allegedly it was to encourage FTBs by taking prospective landlords out of competion for the property. Reality is that In almost 70%of FTB purchases, investors had no involvement or interest in the sale anyway. Hence the last round of stamp duty cuts for FTBs because discouraging one group from buying doesnt necessarily encourage another.
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