18.02.2016 - Property Market Set for Change

Property sales have surged in response to landlords snapping up property before the changes to stamp duty come into force in April; but is a crash coming? The government’s move was designed to curb the buy-to-let market but currently it has had the reverse effect.

While the changes are coming to Buy-to-let investors it is expected this will affect the whole of the property market. From April, Buy-to-let investors face a 3% surcharge on stamp duty band. That means that for properties worth between £125,000 and £250,000, where the stamp duty is currently 2%, buy-to-let landlords will pay 5%. For the average buy-to-let purchase of £184,000, Landlords will pay an extra £5,520.

Property lawyer and Partner at GoodyBurrett Solicitors, Cate Cussell, said “There has been a large increase in investors buying property and pushing to get the purchases complete before the changes to stamp duty take effect. The government’s move was designed to curb the Buy-to-let market but currently it has had the reverse effect.

“It is expected that the market will slow in April, as the reduction in the tax benefits of holding property (over and above main residences) are felt by investors. They may also wish to scale back their portfolios making it a little easier for first time buyers. There are concerns, however, that this may lead to rent and potential house price increases."

Further incoming changes include landlords and other investors being subject to a lower rate of tax relief on mortgage payments, receiving the basic rate of tax relief, 20%, on mortgage payments - to come in from 2017 and, from April 2019, any CGT due will need to be paid within 30 days of selling a property, rather than waiting till the end of the tax year.  

For more information and for advice on how the changes may affect you, speak to one of our Property Team on 01206 577676.

Did you know..?

The current Inheritance Tax Threshold is £325,000