Simon Pook, Head of Residential Property
– This interesting article outlines how second property purchasers and buy-to-let landlords are not being put off by the 3% stamp duty surcharge payable on second homes which may account for the gradual increase of these properties being purchased last year.
In the last three months of 2016 HMRC earned £519 million extra from the 3% surcharge payable on Stamp Duty for second homes. This was from the purchase of 62,800 second homes in Q4 up from 56,200 in Q3 and 30,400 in Q2 2016 with the total revenue take amounting to £1.19 billion.
In an interview with Mortgage Strategy talking about the increase in second property purchases Nick Leeming, Chairman of Jackson-Stops and Staff estate agents, said “This increase is understandable as many buy-to-let investors would likely have rushed to make purchases before 1 April, but the number of liable second home transactions is up again in Q4 to 62,800.
“The data suggests that Buy to Let investors are not being deterred by the new tax which is supposed to be dampening demand from this group to the benefit of first-time buyers.
“We will see the true impact of this policy in time, but my fear is that additional costs will be passed on to tenants. The better solution is a real concerted drive to build more homes, rather than targeting Buy to Let investors. I hope the upcoming Housing White Paper contains a real blueprint for change in this regard.”
There is no doubt initially the extra cost placed upon second property purchases has and will dampen demand. What will be interesting is to see where the figures settle long term and how Price Elastic Buy to Let and holiday home purchases are.
Source: Property 118
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