Investors will still put their stamp on property market despite law change

THIS month saw the introduction of major changes to stamp duty for landlords and second home buyers, but a Yorkshire-based property expert believes they won’t deter the majority of investors.

As of last Friday, anyone buying a second home or investment property now has to pay an additional 3% on top of the usual stamp duty threshold. 

As a result, there is now a 3% tax, rather than zero tax previously, on second homes and investment properties worth up to £125,000 and the rate of tax payable on the proportion of a home priced between £125,000 to £250,000, has risen from 2% to 5%.  This means the stamp duty on a £150,000 investment property is now £5,000, compared to £500 previously.

Patrick McCutcheon, head of residential at Dacre, Son & Hartley, says: “Since these changes were proposed in November’s autumn statement, investor enquiries increased across all 20 of our offices.  In the short-term, the Chancellor’s plans gave a sense of urgency to anyone considering investing in a buy-to-let property or a second home, and we have recently handled plenty of sales where the buyers wanted to complete before the deadline.

“After a very busy few months, it’s inevitable that these stamp duty changes will take some of the heat out of the market, but there’s certainly still investor interest out there, although some might haggle a bit harder on the sales price to try and recoup some of the additional expense they are facing.  Ultimately, most seasoned landlords and determined second home buyers will still continue to buy.”

He added: “We also deal with lots of investors and second home owners who are based in the South of England and overseas.  For many of these people, even when they are faced with a 3% surcharge, they still feel as though they are getting a lot for their money in Yorkshire.”

Dacre, Son & Hartley’s predictions are supported by new research from the Nottingham Building Society, that found just one in seven would-be landlords have cancelled their plans to buy rental homes as a result of the stamp duty changes. 

Nearly 80% of those questioned said they’d still consider investing in property as part of their retirement savings.