This March property expert David Leake, of Housesetc ponders the impact of George Osborne’s impending second home stamp duty tax.
In April this year the Chancellor’s new tax, stamp duty on second properties will be implemented:
What impact will these changes have?
Are investors well prepared?
Will the number of buyers reduce?
The Bank of England confirmed that buy-to-let borrowing is approaching its pre-crash peak, whilst house prices increased by 10% in the year to January 2016. The demand for investment properties continues to rise unabated.
This suggests that George Osborne’s changes have prompted property investors to enter the market earlier than planned, as they aim to complete any purchases before the April stamp duty hike deadline. Whether this demand continues after April is debatable, the 3 percent stamp duty implementation could well dampen such demand. Buy-To-Let and Property-Developer investment continues to deliver generous returns when compared to more traditional investment vehicles.
Although the number of buyers may reduce, will it be enough to dampen or even reduce prices significantly? We’ll just have to wait and see, but I for one doubt it.