Property auctioneers have revealed their concerns about the Chancellor’s decision to raise Stamp Duty for those purchasing buy-to-let properties.

The increase, which last week saw an immediaterise increase in the ‘additional dwelling’ duty from 3% to 5%, will see landlords paying on average £7,000 extra per purchase compared to those buying their main residence.

NAVA Propertymark, the main representative body for property auctioneers within the UK, says it is worried that the extra duty will lead to investors exiting the private rental market and reducing the supply of homes to rent, thereby leading to further rent rises for tenants.

“Following Wednesday’s Budget announcement on the increase in SDLT on second homes and rental properties from 3 per cent to 5 per cent, coupled with many local authorities doubling council tax on second homes, there is little doubt that this will have an impact on investors and likely lead to them exiting the market, perhaps quicker than they had intended to with less homes to rent leading to increases in rents across the board,” says Stuart Collar-Brown, NAVA Propertymark President (main image).

Chatter

“Much of the pre-Budget chatter was surrounding Capital Gains Tax increases but fortunately the rates for residential properties have remained unchanged at 18% (basic) and 24% (higher rate).

“This will be a relief for investors but those with non-residential assets in their portfolios will see an impact to their long-term gains with these rates increasing to be aligned with residential properties.

“The Budget will no doubt have mixed reactions, with some celebrating the unchanged CGT rates for residential properties but the increase in SDLT will surely have a negative effect on private rental sector stock levels and thus possibly increase rent due to further lack of availability.”