Stamp Duty Land Tax changes: One year on

Stamp Duty Land Tax changes: One year on

The has been a dramatic fall in the number of properties being purchased by investors.

Following the introduction of the stamp duty levy for additional home buyers, recent research from My Home Move has indicated that the investment market has shrunk.

Based on figures dating back to 2014, the market for those investing in property has halved in size since April 2016 – a decline which has been linked with the 3% increase in stamp duty.

Commenting on the research was Doug Crawford. The CEO of My Home Move stated: “Even though a year has passed, the introduction of the Stamp Duty levy still remains controversial. On the face of it, the changes to Stamp Duty were presented by the Government as a tax that would affect ‘greedy’ landlords – those who were snapping up properties away from first-time buyers. However, in reality, people who buy additional homes aren’t just landlords with vast portfolios of properties, but parents looking to help their children while at university, or retirees wanting to buy themselves a holiday home.

“I’d argue that the Government’s tax play has affected individuals looking for a second property far more than the career landlord. If anything, the changes have resulted in money being redirected into gifted deposits, particularly for second steppers and middle movers.”

Prior to the stamp duty changes, gifted deposits made up around 8.4% of all purchase transactions, whereas after the legislation changed, this figures grew to around 9.3%. Those already on the property ladder and looking to move home became the largest group to benefit from deposit contributions.

Doug Crawford went on to highlight the impact of the stamp duty change as well as the ‘Bank of Mum and Dad’ stepping in for those having trouble moving up the property ladder.

“It would appear from the data, that while investors were choosing to back-off on buying additional properties, the number of gifted deposits was rising at a rate of around 1%; the equivalent of an additional 3,000 properties were bought using a gifted deposit in the six months after the stamp duty change.

“As such, I suspect it’s the parents, those who ordinarily would have bought a second home, who have redirected their savings towards their children to help them onto, and up, the property ladder.

“Our research has revealed that while ‘second-steppers’ and ‘middle movers’ have always received the greatest number of gifted deposits, after the Stamp Duty change this number increased by 8% over the year. The Bank of Mum and Dad has once again had to step in to help those struggling financially to move beyond their first home – a situation caused by the lack of housing stock and inflated property prices.”

Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

Leave a Reply

Your email address will not be published.