Stamp Duty hike will redraw BTL investment map

Countrywide is the latest group to raise concerns over the forthcoming three percent hike in stamp duty on buy-to-let properties.

The company believes that the changes will effectively redraw the map for investors looking for the greatest returns.

Increases

Fionnualla Earley, Countrywide’s chief economist, said, ‘the effect of the new duty will be to effectively increase the price investors pay and hence reduce the yield they achieve. New landlords must do their sums more carefully to make sure returns on investment add up.’[1]

Research by Countrywide published in the Sunday Times shows their offices in the West Midlands sold 16.7% of their homes to buy-to-let investors-the greatest proportion of any region in England.

However, some individual cities outside of this area saw much bigger shares of their on-sale stock purchased by investors. These are likely to see their markets more significantly affected should the stamp duty hikes deter many from buying next April.

Stamp Duty hike will redraw BTL investment map

Regional concern

There is certainly concern amongst buy-to-let landlords that the rises in tax will have a substantial negative effect on the sector. In Leeds, 41% of the total number of Countrywide’s sales in the year to October were to buy-to-let investors. In Southampton, this proportion was 38% and in Harrow 35%. Plymouth and Calderdale followed with 34%.

Earley noted that, ‘while the region with the higest proportion of investors is the West Midlands, the highest concentrations of investors are spread more widely across the country.’[1]

Investors concerned about the rising stamp duty costs should visit Landlord News’ Stamp Duty Calculator to see just how much the changes will affect them.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2015/12/new-stamp-duty-may-redraw-buy-to-let-investment-map-says-countrywide