Buy-to-let landlords have been urged to act quickly to avoid the 3% stamp duty hikes announced by the Chancellor in the Autumn Statement, which come into force on 1st April 2016.
Lender Together said it has already seen record levels of lending since Mr Osborne altered conditions for landlords earlier on in the year. The rise was recorded following the Chancellor’s move to reduce the amount of tax relief property investors are able to claim back on their mortgages.
Increases
The latest upcoming changes have led the lender to urge landlords keen to add to their portfolio to complete their next purchases in Q1 of 2016, or face considerable tax rises.
Mr Osborne is trying to address what he calls, ‘the growing crisis of home ownership,’ in Britain by raising £1bn by 2021, to fund the construction of new homes.
Gary Bailey, sales director at Together said, ‘this is a double-whammy for buy-to-let landlords who feel they’re being penalised for being entrepreneurial. The hike in stamp duty, together with the previous announcement that reduced landlords’ ability to offset mortgage interest costs against rental income, will certainly have a major impact on the buy-to-let market.’[1]
‘That said, this might well fuel opportunities,’ he continued. ‘For example, we could see a rise in demand for semi-commercial properties, since this latest levy is specifically for residential. Keen property investors will look at the alternatives or will simply build these new costs into their model.’[1]
‘As a lender, we’re likely to see an increase in demand as a result of this announcement. We’ve already seen a significant upturn in lending since the Summer Budget and this is set to increase in Q1 of 2016 as savvy investors aim to avoid the new 3pc levy that will kick in on 1 April 2016,’ he concluded.
[1] http://www.propertyreporter.co.uk/landlords/btl-landlords-must-grasp-window-of-opportunity.html