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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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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