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.

Join our mailing list:

Leave a comment

Our Next Event

Buy-to-Let Roadshow April 2017

Buy-to-Let Roadshow April 2017

Crewe - 18/04/2017

Northampton - 19/04/2017

Essex - 20/04/2017

Brighton - 21/04/2017

Register now

Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

view article
ajay 21 Mar 2017

How is the "robust evidence" looking now?

view article
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

view article
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

view article
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

view article
Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

view article
Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

view article
James Powell
James Powell 27 Feb 2017

This is a very good news.

view article
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

view article
Matt 20 Feb 2017

Is this fake news?

view article
Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

view article
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

view article

Related stories

More articles from Scott Hendry

Buy-to-Let Roadshow
April 2017

18th-21st April

4 days
7 specialists
4 locations
Free to attend

Click here to register now