Stamp duty on second properties is due to increase in April following a Treasury consultation earlier this year and as a result the buy-to-let market has seen a busy start to 2016.
From the beginning of April, most owners in England and Wales will pay a 3% surcharge on stamp duty on purchases of buy-to-let properties and second homes. The move is designed to free up more housing for people trying to buy their first home, who may be struggling due to rising prices and lack of housing supply. Though targeted at landlords and those buying second properties for themselves, the changes will affect anyone buying a second home. This will include parents trying to help their children get on the housing ladder by buying them a house or flat.
The exact policy is due to be outlined in the 2016 Budget in March and landlords appear to be keen to push through any purchases prior to the changes taking affect. The British Bankers’ Association said that the number of mortgage applications approved for house purchases was 27% higher than the same period in 2015. Providing similar data, the Council of Mortgage Lenders reported an eight-year high in mortgage borrowing.
The new charges are expected to raise an extra £1 billion in revenue for the Treasury over the next 15 years, however there are concerns that it will not achieve its’ objective of opening up the housing market. Landlords may simply pass on the charges to tenants through increased rents.
There is still time to get ahead of the changes and to capitalise on this latest upward surge in prices in the market so please contact us to find out how we can sell your home from as little as £499 or 0.5% + VAT.