Landlords might not feel like winners after the Chancellor’s mini-budget, but it could lead to them finding investment opportunities
Chancellor Rishi Sunak is expected to introduce an immediate reduction in stamp duty in his mini-Budget on Wednesday, and although buyers of second home or buy-to-let properties might not get a similar incentive, mortgage advisors and property experts reckon it could help get the housing market moving.
Currently home buyers don’t pay any stamp duty on the first £125,000 of homes, then 2% of the value of the home up to £250,000 and 5% on the next £675,000, while buyers of second homes and buy-to-let properties have to pay an extra 3%.
Mary-Anne Bowring, group managing director at Ringley, believes buy-to-let investors should be encouraged to return to the rental market to boost the supply of homes. “Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market,” she says. “Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”
Carl Shave, director of Just Mortgage Brokers, tells LandlordZONE that while buy-to-let investors may not directly benefit, it could be the stimulus that home movers need to upsize. “That in turn may then be of benefit to investors as homes that otherwise would not have come on the market are made available,” he says. “While the buy-to-let sector has undoubtedly been affected by the pandemic, landlords will likely continue to see property as a good long-term investment.”
However, Angus Stewart, chief executive at Property Master, is expecting a corresponding change for buy-to-let purchases if the cut goes ahead. But he tells LandlordZONE: “Given that there is already a 3% premium for buy-to-let purchases the impact would therefore be that much less and is unlikely to have a significant impact on the market. I do think the Government either need to announce any change now and implement it or rule it out. Uncertainty such as this could lead to buyers holding back.”