The Government has done the exact opposite of what it hoped to do – landlords and first time buyers are competing over cheaper properties, according to a new report.
The conveyancing software supplier Search Acumen claims that the Government has shot itself in the foot with its 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers.
The firm reports that in the last quarter (Q2), buy-to-let landlords snapped up properties that are usually purchased by first time buyers.
The latest Stamp Duty data from HM Revenue & Customs (HMRC), shows 113,100 transactions worth under £250,000 for Q2 2016, up from 106,830 in Q1. Of these, 20,700 were additional properties, liable for the new surcharge.
Comparatively, transactions worth between £250,000-£500,000 dropped from 72,100 in Q1 to 71,000 in Q2, of which just 6,900 were additional properties.
The Managing Director of Search Acumen, Andrew Lloyd, insists: “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 onto 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. This is up significantly from 84,140 in May and 73,370 in April, but down on the 171,370 recorded in March, as landlords rushed to complete on purchases ahead of the Stamp Duty hike.
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