Treasury takings show stamp duty hike hasn’t stopped investors

Treasury takings show stamp duty hike hasn’t stopped investors

The latest figures from the Treasury announcing the amount raised through stamp duty tax since the three per cent increase last year have instilled confidence in the buy-to-let property market, with the results suggesting that investors haven’t been deterred.

The Treasury has revealed that it collected 18 per cent more stamp duty from the sale of residential property than in 2015, with one in five of all homes bought in the second half of 2016 being an additional property.  The amount of tax raised through stamp duty on second homes from June to December was £962 million, or 21 per cent of the entire stamp duty tax takings, demonstrating the proportion of the property market still influenced by buy-to-let investors.

In April 2016, stamp duty increased by 3 per cent on additional homes in an attempt from the Government to curb the buy-to-let industry and free up homes for first time buyers. Stamp duty on a £250,000 buy-to-let property rose from £2,500 to £10,000, whilst for a £400,000 property it has more than doubled from £10,000 to £22,000, causing concerns in the industry that it would dampen the buy-to-let market.

Nearly a year after the changes, we’ve now started to develop an idea of the impact. Overall the market has proved resilient and these figures from the Treasury confirm this.

Investors have weathered the changes, adopting approaches such as forming limited companies, acting early and buying before the increase, or simply paying the higher stamp duty rate because there was still a strong rental yield and profit to be made.

At Together, we saw strong performance in buy-let-lending in 2016, and June was a record month for us in this sector, despite it being in the immediate aftermath of the increased stamp duty.

All of this stands us in good stead for the upcoming reduction to mortgage tax relief and the PRA guideline changes, both due in April. Despite these both causing unease in the industry, for obvious reasons, if we reflect on the reaction to the stamp duty increase it reminds us of the resilience of the buy-to-let sector. There are certainly challenges ahead but looks like property investors are ready to take them in their stride.

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jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

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CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple 14 Apr 2017

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