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TODAY'S OTHER NEWS

Buy-to-let surcharge to spark mini-boom

The surcharge on stamp duty for investors and second homeowners will spark a mini-boom in property prices, a new survey says.

Six out of 10 buy-to-let landlords say they intend to make additional property purchases to beat the new tax.

The 3% surcharge, which comes into force on 1 April, will increase the cost of buying a property from £5,000 to £14,000.

Chancellor George Osborne announced the change in December, saying this would help first-time buyers.

Simon Zutshi, founder of the Property Investors Network, which produced the research, said many landlords are acting now to avoid this extra charge. “This will no doubt cause a mini boom in property prices in the first quarter of 2016, which is ironic as that is hardly going to help first-time buyers.”

The research also showed that nine out of 10 investors said the changes would deter amateurs from investing in property, while a similar number said that rates will increase in 2016 as a result.

Almost seven out of 10 predicted a decrease in the supply of rental accommodation provided by private landlords. 

Zutshi said the change is so unpopular with private landlords that it could damage the chances of the Conservative party winning the next general election.

In the longer run, landlords may sell their properties when other tax changes come into effect, especially the phasing out of higher rate tax relief.

  • Commercial Trust

    "The 3% surcharge, which comes into force on 1 July, will increase the cost of buying a property from £5,000 to £14,000."

    With respect, this is a little simplistic. The actual stamp duty payable, and the impact of the surcharge, will depend on the purchase price. These figures are for a property worth £300,000.

    More detail on the rates payable under the new regime can be found in our Autumn Statement 2015 coverage.

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