Why letting agents need to be ready for a challenging market this autumn
15 August 2018 3245 Views
The buy-to-let sector, which has been under sustained pressure for a number of years now thanks to tax changes designed to make second homes less appealing, could be coming under attack again according to a leading political commentator.
James Forsyth, political editor of The Spectator magazine, recently wrote in a guest column for The Sun newspaper that this autumn’s Budget could see the introduction of yet more stamp duty charges on buy-to-let purchases.
In April 2016, then-Chancellor George Osborne introduced the controversial 3% additional surcharge on second and buy-to-let homes, while a year later the phasing out of mortgage interest tax relief started in earnest.
Now, Forsyth believes the government is planning further stamp duty changes for the buy-to-let market. With the Treasury looking to raise money wherever it can, Forsyth – who is known to have influential sources in key government circles – says one option being considered is a further rise in the stamp duty rate for buy-to-let properties.
The thinking behind this, he says, is to raise money for the Exchequer while also putting a dampener on house prices.
Tom Newton Dunn, The Sun’s political editor, meanwhile said doubt had been cast on whether the extra 3% surcharge on buy-to-let purchases had actually achieved its intention of cooling the buy-to-let market, which is still being fuelled by very low interest rates.
While buy-to-let mortgages now account for less than 13% of all new loans, down from 17% in 2015, the number of buy-to-let landlords in the UK hit an all-time high of 2.5million in the last tax year, which very much suggests people are not being put off.
The government remains non-committal, but if the speculation becomes reality the buy-to-let market could be in for a challenging few months of change and readjustment.
As a letting agent, you need to be prepared for the possibility of this new landscape by having the best processes in place to ensure you can help landlords/investors understand and overcome any alterations.
Excellent, intuitive property software will help you to achieve that; at the click of a button, from anywhere in the world. Gnomen can provide exactly that with our all-in-one, cloud-based system, while our websites will ensure you soar above the competition.
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