Political writer James Forsyth has forewarned that the Treasury is investigating ways of raising money in light of the upcoming autumn budget and planning a possible increase to stamp duty on second homes.
Forsyth claimed: “This [increased stamp duty surcharge] would, so the thinking goes, raise money for the Exchequer and help keep house prices down.”
Osborne’s summer budget of 2015 hit landlords hard when restrictions were imposed on mortgage interest relief as well as a 3% increase imposed on stamp duty for the purchase of second homes. Some landlords have already sold properties; recent government statistics show that England lost 46,000 private rented homes between March 2016 and March 2017. Buy-to-let mortgages have experienced a decline of 17% since 2015.
Former social security secretary, Lord Lilley, felt the solution to increased house prices was: “We just need to build more houses. We’ve let four million extra people into the country and we haven’t built enough houses for the people who are already here.”
John Redwood, former Conservative trade secretary labelled the potential increase to stamp duty as a “tax attack” on people wishing to purchase additional properties.
However, Liz Syms, Chief Executive of Connect for Intermediaries spoke out in response to the rumours of a stamp duty increase: “I haven’t heard any whispers regarding a hike to buy-to-let stamp duty levy.”
Business as usual
She further added: “Buy-to-let has taken a hammering since new tax rules and the levy first came into play. However, for those professional landlords that have stayed in the market it is pretty much business as usual now. Extra costs are factored in and they understand that, as much as the government wants to cool the market, it is in fact vital for those unable to get onto the property ladder.”
“Nonetheless, if the levy is increased it could tip the balance for some landlords who, quite rightly, feel they are being badly harassed by the government. When house deposits are so difficult to raise, rental properties are always needed. So perhaps, it’s time the housing crisis was tackled from a different angle, rather than penalising one particular sector of the market.”
“It’s starting to look like another tax grab”
Managing Director of Buy-to-Let Club, Ying Tan, commented: “Just as we thought the buy-to-let sector was to be given some respite, we’re now hearing that the Treasury may be about to kick it whilst it’s down and fighting to get back up. This will not fix the housing market, and this will not help first time buyers get on the property ladder.
“This will, however, raise more tax revenue and yes, it’s starting to look like just a tax grab. I have no doubt that the landlord will evolve and adjust as they have done countless times before, but I would be delighted to welcome anyone from the government to our offices in Camberley to give them some insight into how to fix the housing market. Increasing stamp duty further will certainly not be on the agenda.”