Stamp Duty Reform Will Boost Buy-to-Let

It is thought that recent Stamp Duty reform will boost the buy-to-let market.

The new rates will benefit those buying homes at the low and middle end of the market.

Chairman of letting agent Ludlow Thompson, Stephen Ludlow, expects the changes to benefit landlords, as investors generally buy properties worth less than £937,500.

He says: “The changes in Stamp Duty will see the biggest increase in net returns for more modest investments, such as smaller properties in zone 3 of London, city centre apartments, flats above shops, ex-local authority property and property in secondary locations.

Stamp Duty Reform Will Boost Buy-to-Let

Stamp Duty Reform Will Boost Buy-to-Let

“The reforms could encourage those who may have been delaying their purchase until after the election to reconsider. The new rates should also provide a boost to the sales market and result in an increased number of purchases in this usually quiet time for residential property deals.”

Graham Davidson, Managing Director of Sequre Property Investment, also believes the changes will help investors.

For example, if a landlord buys a high-end two-bedroom flat in Manchester city centre for £150,000, they will now pay Stamp Duty of £500, saving them £1,000.

Davison explains: “However, the impacts on the £925,000-plus market will certainly be felt throughout the industry, in particular by the higher end London property market. We would expect to see this contribute to a further slowing of the market there.”

However, it is also thought that the reform will bring more owner-occupiers into the market.

Group Chief Executive of Countrywide, Alison Platt, says: “So for those who are thinking of selling their property, there has never been a better time. Equally for buyers, a stable interest rate environment and the availability of a range of attractive mortgage products means that now is an ideal time to purchase a home.”

But how will the changes affect the London market?

Jamie Lester, Head of Haus Properties, believes the £1.5m-£2m sector will suffer.

He states: “This market has been especially active with buying sticking below the 7% Stamp Duty and proposed mansion tax thresholds. These buyers will have to pay a significantly higher amount.

“For example, someone purchasing a £1.9m property would have paid £95,000 under the old Stamp Duty rules, whereas under the reforms, they will be paying almost £50,000 more at £141,750.

“However, those buying just above £2m won’t be quite so heavily hit, for example, someone purchasing at £2.1m will now be paying £165,750, an increase of £18,750.”

So will your Stamp Duty be lower on the next property you purchase?

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