25th
Nov 2016
In spite of the Industry calling for the Chancellor to support the private rented sector by repealing Osborne's attack on the sector with his stamp duty increase of the reduction of mortgage interest relief , he carried on regardless with the punitive measures.
Landlords are bitterly disappointed as it is felt that the Chancellor had missed a golden opportunity to encourage further investment into the sector.
George Osborne's stamp duty increases has added an extra £330 million into the Treasury's coffers however it had been forecasted to produce £700 million, so it is no wonder that there were calls for it to be scrapped.
There was a frenetic rush for buy-to-let and second homes properties in the first quarter of the year to avoid the 3% stamp duty increase, however from April onwards smaller numbers of investors have been increasing their portfolios; it makes sense to scrap the duty to encourage higher levels of investment.
The Council of Mortgage Lenders compiles seasonally adjusted monthly figures of buy-to- let mortgages which shows that landlords have borrowed less from September last year to September this year by 22% to £2.8 billion.
Anthony Hesse managing director of an estate agency and recruitment company, said: “Slashing the rate of stamp duty would have been Philip Hammond’s single most effective fix for UK finances.”
“There is no more economically stimulating activity than house sales and purchases - so it would have been a tax cut that would largely have paid for itself. As a result, the continued stifling of the market is a missed opportunity for both the estate agency sector and the country.”
According to industry figures approximately 440,000 landlords who are basic rate tax payers will be facing a higher tax bracket from April 2017. By April 2020 once the full reduction is introduced it will mean that over the next four years tenants' rents will be raised to compensate for this; so in effect the renting public will be forced to pay another indirect tax.
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