The Government has shot itself in the foot with extra Stamp Duty charges on buy-to-let landlords, it has been claimed
The conveyancing software supplier Search Acumen claims that buy-to-let landlords snapped up properties usually purchased by first-time buyers in the last quarter – after the 3% Stamp Duty surcharge kicked in on April 1.
HMRC Stamp Duty data shows 113,100 transactions worth under £250,000 in the second quarter of 2016, up from 106,830 in the first quarter.
Of the 113,100, 20,700 were additional properties, liable for the surcharge.
In comparison, transactions between £250,000 and £500,000 fell from 72,700 to 71,000, of which just 6,900 were additional properties.
Andrew Lloyd, managing director of Search Acumen, said: “The Government has in many ways shot themselves in the foot.
“Instead of freeing up the lower end of the market for first-time buyers as promised by George Osborne, competition for these more affordable properties has intensified and therefore further squeezed out many first-time buyers from getting on to the housing ladder.
“The newly appointed housing minister will need to focus his attention on delivering a working and sustainable housing market, especially for this end of the market.”
Overall there were 102,010 residential property transactions in June, according to HMRC.
The figure was a big jump from 84,140 in May and 73,370 in April, but down from the big spike of 171,370 seen in March before the Stamp Duty hike.
Comments (2)
I think it will depend upon which part of the country the landlord is investing in. In the North East and North West huge swathes of properties are at the cheaper end of the market. In effect private landlords are filling the gaps because there is hardly any social housing available. Consider Newcastle, a growing population, people coming in from all over the world to work. A vibrant young population. These people should be able to access affordable housing in the city. They are falling over themselves to rent flats down in South Shields because the rents are too high for them in Newcastle. If I was a landlord I’d snap up housing in South Shields. Flats are selling for £65 to £90 k. And if anyone needs a good conveyancing firm…
Too many figures missing from this to make that call. You need to know what the proportion of properties were second properties in the first quarters otherwise the figures are meaningless.
Just because more landlords competed in the less than £250,000 range, doesn’t mean competition intensified. You need to show the previous quarters figures to support that statement.
Is Andrew Lloyd suggesting that landlords buy the cheapest properties to save on stamp rather than the correct property that provides the best long term ROI? If so, I don’t think so. That displays again a misunderstanding of what professional landlords are all about.