Leading mortgage peer to peer lender LendInvest has published a statement of caution and concern regarding the recently increased stamp duty tax on buy-to-let properties. Christian Faes, CEO of LendInvest, called the Stamp Duty Land Tax (SDLT) increase “bad news” as landlords will be facing additional cost – something inevitably passed on to renters. The comments from LendInvest come alongside their release of their most recent quarterly research index on the UK buy-to-let market.
According to LendInvest, as the additional SDLT nears, starting April 1st, costs will rise across the board but some more dramatically than others.
Their report states:
- Landlords in 13% of country to pay SDLT for first time
- Darlington, Halifax and Doncaster among worst affected by first-time SDLT payment
- Outer London landlords hit worse by overall percentage increase in SDLT due
- Landlords in Tunbridge Wells, Dartford, Romford will see SDLT rise more than 300%, vs <200% in Inner postcode areas
- Areas with most properties subject to SDLT for first time and lowest average rents
Faes was highly critical of the increased stamp tax. He warned that renters and landlords would experience financial pain;
”The stamp duty hike spells bad news for landlords – and their tenants. Put simply: when taxes rise, someone has to pay. Our latest BTL Index shows that the likely payer is ultimately going to be the tenant, with higher rents. The Stamp Duty Land Tax hike will cause rental yields to fall for landlords, putting pressure on them to raise the rents they charge. It’s not just in Inner London, where landlords’ taxes will soar, that we can expect to see landlords and tenants squeezed financially. The Index shows that all across England and Wales, we will many landlords factoring several thousands of pounds of stamp duty tax into their budgets for the first time. Towns like Sunderland, Blackburn, Wigan and Oldham could be particularly badly impacted: here, rental yields are comparatively good but average house prices are below £125,000 meaning SDLT will be imposed for the first time.”
Faes believes encouraging home ownership does have merit but said there are no shortcuts to boosting housing inventory;
“The Treasury’s decision to inflict this tax hike is part of their longer term plan to professionalise the buy-to-let market and make Britain a country of homeowners. While the mission has its merits, there are no quick fixes to the nationwide housing crisis. Until there are more houses on the streets that people can buy at reasonable prices, landlords have their place and their tenants must be protected.”
Additional data from LendInvest is available here.
