The stamp duty surcharge of 3% is just a matter of weeks from coming into force. However, a leading lettings expert has stated that the forthcoming changes are causing, ‘confusion and uncertainty,’ in the private rental sector.
Ben Evans, MD of Fleet Milne Property, a lettings consultancy based in central Birmingham, believes building barriers to investment will deter thousands of potential tenants searching for rental accommodation in his area.
Lack of stock
Mr Evans said, ‘for years now, central Birmingham has been characterised by a lack of rental stock and the city desperately needs new apartments to meet demand. At present, it is no exaggeration to say we could potentially let every property to four or five different parties.’[1]
‘If investors are deterred from purchasing new properties because of onerous SDLT payments making their investment unviable, new rental stock simply will not become available to the extent that it needs to in order to meet ongoing demand and rents will continue to rise as a result,’ he continued.[1]
SDLT changes causing ‘confusion and uncertainty’
Confusion
Evans went on to say that, ‘even though we are just weeks away from the changes to SDLT being implemented, there is still confusion and uncertainty within the sector and the imminent increase continues to create more questions than answers.’[1]
There has been a flurry of investors looking to beat the April 1st deadline across the country. However, a report from rplan.co.uk suggests that nearly a quarter of would-be buy-to-let landlords have been put off by the changes.
‘Overnight, the SDLT on a £250,000 property purchased for buy-to-let will increase from £2,500 to a massive £10,000,’ Evans suggests.
In Birmingham though, activity remains high, with prices of apartments in central Birmingham still relatively low-cost.
[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/stamp-duty-change-causing-confusion-and-uncertainty-in-rental-sector